Funded status of barrel corporations pension plan

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Barrel Corporation had service and interest costs of $50,000 related to its defined benefit pension plan for the year ended December 31, Year 7. The company's unrecognized prior service cost was $200,000 at December 31, Year 6 and the average remaining service life of the company's employees was 20 years. Plan assets earned an expected and actual return of 10% during Year 7. The company made contributions to the plan of $25,000 and paid benefits of $30,000 during the year. The pension plan had plan assets with a fair value of $300,000 at December 31, Year 6. The PBO was $400,000 at December 31, Year 6, and $420,000 at December 31, Year 7. Barrel's effective tax rate is 30%. What is funded status of Barrel Corporation's pension plan at December 31, Year 7?

a) $20,000 underfunded.

b) $75,000 overfunded.

c) $95,000 underfunded.

d) $120,000 overfunded.

Reference no: EM13127313

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