On January 1 of the current reporting year, Coda Company's projected benefit obligation was $29.4 million. During the year, pension benefits paid by the trustee were $3.4 million. Service cost was $9.4 million. Pension plan assets earned $4.4 million as expected. At the end of the year, there was no net gain or loss and no prior service cost. The actuary's discount rate was 10%. Required: Determine the amount of the projected benefit obligation at December 31. (Enter your answers in millions rounded to 2 decimal places. Amounts to be deducted should be indicated with a minus sign.)

The amount of the projected benefit obligation at December 31 was  $ 38.34 million

Explanation:

According to the given data, we have the following:

Beginning PBO= $29.4 million

Service cost=$9.4 million

The actuary's discount rate was 10%, hence Interest cost (10% x $29.4 million)=$2.94 million

Also, there is a Loss (gain) on PBO=$0 , and pension benefits paid by the trustee were $3.4 million.

Therefore, to calculate the amount of the projected benefit obligation at December 31 we would have to use the following formula:

Ending PBO=Beginning PBO+Service cost+Interest cost-pension benefits

                   =$29.4 million+$9.4 million+$2.94-$3.4 million

                   =$38.34 million

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