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1 November, 22:31

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.

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  1. 1 November, 22:41
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    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
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