Allison Corporation has Noncontributory, Funded, Defined Benefit Pension Plan. A

Question

Allison Corporation has Noncontributory, Funded, Defined Benefit Pension Plan. As of 12-31-2017, the projected benefit obligation (PBO) was $500,000. As of 12-31-2017, the fair value of the pension plan assets was $400,000. As of 12-31-2017, Allison Company had unrecognized prior service cost of $40,000. As of 12-31-2017, Allison Company had cumulative unrecognized losses of $10,000. As do many companies, Allison tries to minimize its reported liabilities on the balance sheet while complying with generally accepted accounting principles (GAAP).

On Allison's 12-31-2017 balance sheet, Allison will report a pension plan

Explanation / Answer

PBO at beginning 500000

+ Service costs 40000

Unrecognised losses 10000

PBO at end of year = 530000

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