The following is the only information pertaining to kane co.âs defined benefit pension plan: pension asset, january 1, year 1 $ 2,000service cost 19,000interest cost 38,000actual and expected return on plan assets 22,000amortization of prior service cost arising in a prior period 52,000employer contributions 40,000in its december 31, year 1, balance sheet, what amount should kane report as the unfunded or overfunded projected benefit obligation () $ 7,000 overfunded.(b) $15,000 underfunded.(c) $45,000 underfunded.(d) $52,000 underfunded.

option (a) is correct answer '$ 7,000 overfunded'

Explanation:

Data:

Pension asset, January 1, Year 1 = $ 2,000

Service cost = $ 19,000

Interest cost = $ 38,000

Actual and expected return on plan assets = $ 22,000

Amortization of prior service cost arising in a prior period = $ 52,000

Employer contributions = $ 40,000

Total expenses = Service cost + Interest cost = $ 19,000 + $ 38,000  

= $ 57000

Now,

projected benefit obligation (PBO) = (Pension asset + Actual and expected return ) - Total expenses

or

projected benefit obligation (PBO)

= $ 2,000 + $ 22,000 + $ 40,000 - $ 57000

or

overfunded projected benefit obligation (PBO) = $ 7,000

hence,

option (a) is correct answer '$ 7,000 overfunded'

answer; (inseparability);

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.