Reference no: EM132885744

Question - On January 1, 2021, L Co. has the following data relating to its defined benefit plan:

Fair value of plan assets 4,400,000

Defined benefit obligation 3,000,000

Surplus 1,400,000

During the year 2021, L Co. recognized the following:

Past service cost 800,000

Current service cost 1,200,000

Benefits paid during the period 460,000

Actual return on plan assets 600,000

Contributions to the fund 1,200,000

Actuarial loss due to increase in DBO 160,000

Discount rate 12%

Assume there are no asset ceilings at the beginning and end of the year.

Based on the above data, answer the following:

1. How much is the fair value of plan assets as of December 31, 2021?

a. 5,740,000

b. 5,140,000

c. 6,200,000

d. 5,668,000

2. How much is the defined benefit obligation as of December 31, 2021?

a. 5,520,000

b. 3,940,000

c. 5,060,000

d. 4,992,000