Provide solution on each answer. Thank You. Generous Company has established a defined benefit plan indicating a plan formula for annual benefit equal to 2% multiplied by the number of years in...

Provide solution on each answer. Thank You.

Generous Company has established a defined benefit plan indicating a plan formula for annual benefit equal to 2% multiplied by the number of years in service multiplied by the final year’s salary. The annual benefit is payable at the end of each year.



An employee was hired by the entity on January 1, 2001 and expected to retire on December 31, 2045. The employee’s retirement is expected to span 21 years. The employee’s final salary at retirement is expected to be P800,000 and the appropriate discount rate is 8%.

On January 1, 2021, the plan formula was amended by increasing the percentage from 2% to 3%. The amendment was made retroactive to consider past service years. The present value of an ordinary annuity of 1 at 8% for 21 periods is 10.02 and the present value of 1 at 8% for 25 periods is 0.15.



1. What is the projected benefit obligation before amendment on January 1, 2021?



2. What is the projected benefit obligation after on January 1, 2021?



3. What is the past service cost for 2021 as a result of the amendment?