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2 March, 14:50

The EPBO for a particular employee on January 1, 2021, was $150,000. The APBO at the beginning of the year was $30,000. The appropriate discount rate for this postretirement plan is 5%. The employee is expected to serve the company for a total of 25 years with 5 of those years already served as of January 1, 2021. What is the APBO at December 31, 2021?

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Answers (1)
  1. 2 March, 16:29
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    The APBO at December 31, 2021 is $37,800.

    Explanation:

    In order to calculate the ABPO at December 31, 2021 we have to use the following formula:

    ABPO = EBPO as on December 31, 2021 * ratio period served over aquired

    = ($150,000 * 1.05) * 6 years

    25 years

    = $157,500 * 6 years

    25 years

    = $37,800.

    The APBO at December 31, 2021 is $37,800.
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Home » Business » The EPBO for a particular employee on January 1, 2021, was $150,000. The APBO at the beginning of the year was $30,000. The appropriate discount rate for this postretirement plan is 5%.
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