The trustee for the Bronson Corporation pension sent a report to the CEO with the following information for the fiscal year:
$\begin{array}{lr}
\text { Beginning balance of plan assets at fair value } & \$ 1,560,000 \
\text { Actual return on plan assets } & \$ 210,000 \
\text { Employer's contribution } & \$ 150,000 \
\text { Distributions to retirees } & \$ 75,000 \
\text { Service cost } & \$ 125,000 \
\text { Interest cost I } & \$ 156,000 \
\text { Loss from changes in benefits or assumptions } & \$ 35,000 \
\text { Beginning balance of the PBO } & \$ 1,580,000
\end{array}$
-The ending balance of the pension benefit obligation (PBO)is

Question

Quizplus · Accepted Answer

The ending balance of the PBO is calculated by starting with the beginning balance of the PBO and then adding the service cost, interest cost, and any losses from changes in benefits or assumptions. The formula is: Beginning PBO + Service Cost + Interest Cost + Loss from changes = Ending PBO. Therefore, $1,580,000 + $125,000 + $156,000 + $35,000 = $1,896,000. However, the correct calculation based on the provided formula and numbers should actually result in $1,896,000, indicating a mistake in my explanation regarding the choice selection. The correct ending balance of the PBO, based on the calculation, should indeed be $1,896,000, aligning with option C, not B as initially stated. This correction addresses the calculation error.

The Trustee for the Bronson Corporation Pension Sent a Report