What is net effect of the required adjustment on accumulated

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Reference no: EM132805768

Arroz Corporation implemented a defined benefit pension plan for its employees on January 2, 20X4. The following data are provided for 20X6 and as of December 31, 20X6:

Projected benefit obligation $600,000

Accumulated benefit obligation 550,000

Plan assets at fair value 420,000

Pension cost for 20X6 180,000

Pension contribution for 20X6 150,000

Problem 1: Assume that as of January 1, 20X6, Arroz's pension plan was fully funded, and there were no recorded pension assets or liabilities on the balance sheet. Assuming a tax rate of 40%, what is the net effect of the required adjustment on accumulated other comprehensive income on December 31, 20X6?

A. $90,000 decrease.

B. $108,000 decrease.

C. $36,000 decrease.

D. $0

Reference no: EM132805768

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