Data for 2021 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 2021 by:

The projected benefit obligation was underfunded at the end of 2021 by: $40,000

Solution:

Given,

PBO, January 1,            $240,000

       December 31,         $270,000

pension plan assets (fair value) January 1,          $180,000

                                                    December 31,     $230,000

Now ,

The projected benefit obligation was underfunded at the end of 2021 by :

PBO                            ($270,000)

Plan assets                   230,000

Funded status             ($40,000) [ $270,000 - 230,000 ]

∴ The projected benefit obligation was underfunded at the end of 2021 by: $40,000

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