contestada

XYZ company received the PBO report from the actuary with the following information:

PBO (end of 2018): $110,000;
benefits paid to retirees (during 2018): $10,000;
interest cost (during 2018): $8,000;
the discount rate applied: 10%.

Required:
What was the service cost for 2018?

Respuesta :

Tundexi

Answer:

$32,000

Explanation:

                    XYZ company

                     Service cost

Ending PB0                  $110,000

Less: Beginning PBO   $80,000   ($8,000/10%)

         Interest Cost       $8,000

                                     $22,000

Add:  Benefits paid      $10,000

Service cost                 $32,000

Hence, the service cost for XYZ Company in 2018 is $32,000

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