The following information pertains to Hopson Co.'s pension plan: $\begin{array}{lr}
\text { Actuarial estimate of projected benefit obligation at } 1 / 1 / 15 & \$ 72,000 \
\text { Assumed discount rate } & 10 \% \
\text { Service costs for } 2015 & \$ 28,000 \
\text { Pension benefits paid during 2015 } & \$ 15,000
\end{array}$ If no change in actuarial estimates occurred during 2015, Hopson's projected benefit obligation at December 31, 2015 was

Question

Quizplus · Accepted Answer

The projected benefit obligation (PBO) at the end of the year is calculated by adjusting the beginning PBO for any service costs, interest costs, and benefits paid during the year. The beginning PBO is $72,000. The service cost for the year is $28,000, which increases the PBO. The interest cost is 10% of the beginning PBO ($72,000 * 10% = $7,200), which also increases the PBO. The benefits paid during the year amount to $15,000, which decreases the PBO. Therefore, the calculation is as follows: $72,000 (beginning PBO) + $28,000 (service cost) + $7,200 (interest cost) - $15,000 (benefits paid) = $92,200. The correct answer is not listed, indicating a possible mistake in the calculation or in the selection of provided options. The correct calculation based on the given options should be: $72,000 + $28,000 + $7,200 - $15,000 = $92,200. However, given the options, the closest or intended correct answer might be misstated, so based on the provided calculation method, none of the options accurately reflect the correct calculation.

The Following Information Pertains to Hopson Co If No Change in Actuarial Estimates Occurred During 2015, Hopson's