Question

At the end of the current period, Pronghorn Inc. had a projected benefit obligation of $369,000 and pension plan assets (at fair value) of $317,000. What are the accounts and amounts that will be reported on the company's balance sheet as pension assets or pension liabilities

Answer 1

Answer:

The correct answer is Pension liability account of amount $52,000.

Explanation:

According to the scenario, the given data are as follows:

Projected benefits = $369,000

Pension plan assets = $317,000

So, we can check for the accounts and amounts by using following formula:

Accounts and amounts = Pension plan assets - Projected benefits

= $317,000 - $369,000

= -$52,000

Here, Negative sign indicates the liability.

Hence, it shows pension liability account of $52,000.