Question

Rossi Company has a defined-benefit plan. At the end of 2015, it has determined the following information related to its pension plan:Projected benefit obligation $730,000Accumulated benefit obligation 660,000Fair value of pension plan assets 610,000The amount of pension liability that is reported in Rossi's balance sheet at the end of 2015 isA. $150,000. B. $120,000. C. $70,000. D. $50,000.

Answer 1

Answer:

amount of pension liability = $120,000

so correct option is B. $120,000

Explanation:

given data

Projected benefit = $730,000

Accumulated benefit = 660,000

Fair value pension plan assets = 610,000

to find out

amount of pension liability reported in Rossi balance sheet at the end

solution

we get here amount of pension liability that is express as

amount of pension liability = Projected benefit - Fair value of pension plan assets   ............1

put here value we get

amount of pension liability = $730,000 - $610,000

amount of pension liability = $120,000

so correct option is B. $120,000