Franklin Company Sponsors a Noncontributory, Defined-Benefit Pension Plan

Franklin Company sponsors a noncontributory, defined-benefit pension plan. At December 31, 2011, the end of the company's fiscal year, the actuary's report showed pension benefits paid of $15,000, and PBO balance of $300,000. The trustee's report showed a beginning plan assets balance (at fair value) of $240,000, contributions for the year of $36,000, and an actual return on plan assets of 10 percent (the expected return was 9 percent) .
The underfunded PBO at the end of 2011 was

A) $0.
B) $15,000.
C) $24,000.
D) $30,000.

Correct Answer:

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