Question:

Fact pattern for pension plan

Pension Benefit Obligation (PBO) at beginning of year= $800,000

Expected return on plan assets= 6%

Actual return on plan assets= 8%

Interest costs= 4%

Current year service costs for existing employees= $40,000

Employer contribution payments to plan (end of year)= $40,000

Investment plan assets at FV beginning of year= $200,000

Retiree benefits paid out of investments (end of year)= $80,000

Accounting costs for pension reporting paid for by the employer= $10,000

1. What were plan assets at Fair Value at year end?

2. What was the ending PBO?