Merciful Industries Has a Beginning PBO Balance of $500,000 and a Settlement

question 61

Multiple Choice

Merciful Industries has a beginning PBO balance of $500,000 and a settlement rate of 6%. As a result of an amendment to the current union contract, there are prior service costs of $49,000. What is the journal entry to record the change to the current union contract?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Pension Expense } & 2,940 & \\
• \hline \text { Projected Benefit Obligation } & & 2,940 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Pension Expense } & 30,000 & \\
• \hline \text { Other Comprehensive Income } & & 30,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | r | r | }
• \hline \text { Other Comprehensive Income-Prior Service Costs } & 49,000 & \\
• \hline \text { Projected Benefit Obligation } & & 49,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Pension Expense } & 46,060 & \\
• \hline \text { Other Comprehensive Income } & & 46,060 \\
• \hline
• \end{array}\]

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Definitions:

Anorexia Nervosa

An eating disorder characterized by an intense fear of gaining weight and a distorted body image, leading to self-imposed starvation and significant weight loss.

Diagnostic Criteria

The specific symptoms and signs that mental health professionals use to identify and classify mental disorders.

Other Specified Feeding

A classification for eating or feeding disturbances that do not meet the criteria for any specific feeding or eating disorder.

Eating Disorder

A range of psychological disorders characterized by abnormal or disturbed eating habits, which can significantly impact health and well-being.