At December 31, 2015, the following information was provided by the Vargas Corp. pension plan administrator: $$\begin{array} { l r }
\text { Fair value of plan assets } & \$ 4,500,000 \
\text { Accumulated benefit obligation } & 5,580,000 \
\text { Projected benefit obligation } & 7,400,000
\end{array}$$ What is the amount of the pension liability that should be shown on Vargas' December 31, 2013 balance sheet?

Question

At December 31, 2015, the following information was provided by the Vargas Corp. pension plan administrator: $$\begin{array} { l r } 
\text { Fair value of plan assets } & \$ 4,500,000 \
\text { Accumulated benefit obligation } & 5,580,000 \
\text { Projected benefit obligation } & 7,400,000
\end{array}$$ What is the amount of the pension liability that should be shown on Vargas' December 31, 2013 balance sheet?

Quizplus · Accepted Answer

The pension liability that should be shown on the balance sheet is the difference between the projected benefit obligation and the fair value of plan assets, which is $7,400,000 - $4,500,000 = $2,900,000.

At December 31, 2015, the Following Information Was Provided by the Vargas