Data for 2013 were as follows: PBO, January 1, $240,000 and December 31, $270,000; pension plan assets (fair value) January 1, $180,000, and December 31, $230,000. The projected benefit obligation was underfunded at the end of 2013 by:

Question

Quizplus · Accepted Answer

The underfunded amount of a defined benefit pension plan is calculated as PBO - Plan Assets.

At the beginning of the year, the plan was underfunded by $240,000 - $180,000 = $60,000.
At the end of the year, the plan was underfunded by $270,000 - $230,000 = $40,000.

Therefore, the underfunded amount increased by $40,000 during the year, so the answer is D.

Data for 2013 Were as Follows: PBO, January 1, $240,000