Pearsall Company has a defined benefit pension plan. On December 31 (the end of the fiscal year), the company received the PBO report from the actuary. The following information was included in the report: ending PBO, $115,000; benefits paid to retirees, $14,500; interest cost, $7,500. The discount rate applied by the actuary was 10%. What was the service cost for the year? Multiple Choice $93,000. $47,000. $7,000. $22,000.

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter19: Accounting For Post Retirement Benefits
Section: Chapter Questions
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Pearsall Company has a defined benefit pension plan. On December 31 (the end of the fiscal year), the company received the PBO report from the
actuary. The following information was included in the report: ending PBO, $115,000; benefits paid to retirees, $14,500; interest cost, $7,500. The
discount rate applied by the actuary was 10%. What was the service cost for the year?
Multiple Choice
$93,000.
$47,000,
$7,000.
$22,000.
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Transcribed Image Text:Pearsall Company has a defined benefit pension plan. On December 31 (the end of the fiscal year), the company received the PBO report from the actuary. The following information was included in the report: ending PBO, $115,000; benefits paid to retirees, $14,500; interest cost, $7,500. The discount rate applied by the actuary was 10%. What was the service cost for the year? Multiple Choice $93,000. $47,000, $7,000. $22,000. < Prev 16 of 16 Next MacBook Air
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