How do you calculate the defined benefit obligation


Question: On January 1, 2016, Carrot ltd. reported the following balances relating to their defined benefit pension plan:

Defined benefit obligation $3,200,000

Fair Value of plan assets $3,200,000

Other data that is related to the plan includes

Current service cost $140,000

Contributions to the plan $204,000

Actual return on plan assets $192,000

Benefits paid $200,000

Interest (discount) rate 9%

How do you calculate the defined benefit obligation at December 31, 2016? As well as how do you calculate fair value of the plan assets at December 31, 2016? Also how would you calculate the pension expense for 2016? Finally, which journal entries would you need to record pension expense and the contributions in 2016?

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Accounting Basics: How do you calculate the defined benefit obligation
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