Some years ago, junior limited established a defined benefit pension plan for its employees. Thecompany has since introduced a defined contribution plan, which all new staff joined when commencingemployment which junior limited. Although the defined benefit plan is now closed to new recruits, thefund continues to provide for employees who have been with the company for a long time. Thefollowing actual report has been received for the defined benefit plan:Present value of the defined benefit obligation 31 December 2017Past service costNet interestCurrent service costBenefits paidActuarial loss on DBOPresent value of the defined benefit obligation 31 December 2018Fair value of plan assets at 31 December 2017Return on plan assetsContributions paid to the plan during the yearBenefits paid by the plan during the yearFair value of plan assets at 31 December 20182018/$20 000 0002 000 000?800 0002 100 000100 00023 000 00019 000 000?1 000 0002 100 00020 130 000Additional information:A. All contributions received by the plan were paid by junior limited. Employees make nocontributionsC. Calculate the net interest and the return on plan assets for 2018.B. The interest rate used to measure the present value of the defined benefit obligations was 10%at the 31st December 2017 and 31st December 2018.C. The asset ceiling was nil at 31st December 2017 and 31st December 2018.Requirements:A. Determine the surplus or deficit of junior Ltd's define benefit plan at 31st December 2018B. Determine the net defined benefit asset or liability that should be recognized by maple limitedat the 31st December 2018.D. Prepare a pension worksheet for the period ended December 31st 2018.E. Prepare the journal entries to account for the defined benefit pension plan in the books ofjunior limited for the year ended December 31st 2018.

The anticipated present value of all future pension benefits that employees would get as of a…

A. Determine the surplus or deficit of junior Ltd's define benefit plan at 31st December 2018 B. Determine the net defined benefit asset or liability that should be recognized by maple limite at the 31st December 2018. C. Calculate the net interest and the return on plan assets for 2018. D. Prepare a pension worksheet for the period ended December 31st 2018. E. Prepare the journal entries to account for the defined benefit pension plan in the books of junior limited for the year ended December 31st 2018.

A. Determine the surplus or deficit of junior Ltd's define benefit plan at 31st December 2018 B. Determine the net defined benefit asset or liability that should be recognized by maple limite at the 31st December 2018. C. Calculate the net interest and the return on plan assets for 2018. D. Prepare a pension worksheet for the period ended December 31st 2018. E. Prepare the journal entries to account for the defined benefit pension plan in the books of junior limited for the year ended December 31st 2018.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 6E

See similar textbooks

Similar questions

Some years ago, Junior Ltd established a defined benefit pension plan for its employees. The company has since introduced a defined contribution plan, which all new staff join when commencing employment with Junior Ltd. Although the defined benefit plan is now closed to new recruits, the fund continues to provide for employees who have been with the company for a long time. The following actuarial report has been received for the defined benefit plan: 2018/$ Present value of the defined benefit obligation 31 December 2017 20,000,000 Past service cost 2,000,000 Net interest ? Current service cost 800,000 Benefits paid 2,100,000 Actuarial loss on DBO 100,000 Present value of the defined benefit obligation 31 December 2018 23,000,000 Fair value of plan assets at 31 December 2017 19,000,000 Return on plan assets ? Contributions paid to the plan during the year 1,000,000 Benefits paid by the plan during the year Fair value of plan assets at 31 December 2018…
Some years ago, Junior Ltd established a defined benefit pension plan for its employees. The company has since introduced a defined contribution plan, which all new staff join when commencing employment with Junior Ltd. Although the defined benefit plan is now closed to new recruits, the fund continues to provide for employees who have been with the company for a long time. The following actuarial report has been received for the defined benefit plan: 2018 ($) Present value of the defined benefit obligation 31 December 2017 20,000,000 Past service cost 2,000,000 net interest a current service cost 800,000 benefits paid 2,100,000 actuarial loss on DBO 100,000 Present value of the defined benefit obligation 31 December 2018 23,000,000 Fair value of plan assets at 31 December 2017 19,000,000 Return on plan assets b Contributions paid to the plan during the year 1,000,000 Benefits paid by the plan during the year 2,100,000 Fair value of plan assets at 31…
Some years ago, Junior Ltd established a defined benefit pension plan for its employees. The company has since introduced a defined contribution plan, which all new staff join when commencing employment with Junior Ltd. Although the defined benefit plan is now closed to new recruits, the fund continues to provide for employees who have been with the company for a long time. The following actuarial report has been received for the defined benefit plan: Present value of the defined benefit obligation 31 December 2017 : 20,000,000 Past service cost : 2,000,000 Net interest : ? Current service cost :800,000 Benefits paid : 2,100,000 Actuarial loss on DBO : 100,000 Present value of the defined benefit obligation 31 December 2018 : 23,000,000 Fair value of plan assets at 31 December 2017 :19,000,000 Return on plan assets : ?Contributions paid to the plan during the year :1,000,000 Benefits paid by the plan during the year : 2,100,000 Fair value of plan assets at 31 December 31, 2018 :…
FMC Inc. provides its employees with a defined benefit pension plan. Details are as follows: Present value defined benefit obligation (DBO) — December 31, 2020 $7,000,000 Plan assets — December 31, 2020 $5,900,000 Plan’s actuary confirmed that 4% is the appropriate interest rate to use. Current service costs (CSC) for the year $590,000 Past service costs (PSC) (improvement in benefits) — January 1, 2020 $60,000 Expected ending DBO — December 31, 2020 $7,200,000 Expected ending plan assets — December 31, 2020 $6,500,000 Remitted to pension trustee — evenly throughout year $670,000 Payments to retirees — evenly throughout year $640,000 What journal entry should FMC prepare to record the remeasurement gains/losses and actuarial gains/losses for the year? Assume FMC reports under IFRS. Question 18 options: a) DR OCI — actuarial losses 200,000 DR OCI — losses on remeasurement of plan assets 600,000 CR Net defined benefit liability…
Sunshine company has a defined benefit pension plan. Using the data available related to pension, calculate the amount of amortization of the net loss or gain that should be included as a component of pension expense for the current year? Average remaining service period of active employees Net gain, January 1 PBO, January 1 Plan assets, January 1 12 years $214,600 $1,630,000 S1,930,000 a. $21,600 b. $1,800 c. $51,600 d. $4,300
Martin Services Company provides its employees vacation benefits and a defined contribution pension plan. Employees earned vacation pay of $40,000 for the period. The pension plan requires a contribution to the plan administrator equal to 10% of employee salaries. Salaries were $500,000 during the period. a. Provide the journal entry for the vacation pay. If an amount box does not require an entry, leave it blank. Vacation Pay Expense fill in the blank 5e6293fdafbafdb_2 fill in the blank 5e6293fdafbafdb_3 Vacation Pay Payable fill in the blank 5e6293fdafbafdb_5 fill in the blank 5e6293fdafbafdb_6 b. Provide the journal entry for the pension benefit. If an amount box does not require an entry, leave it blank. Pension Expense fill in the blank 30546afde038fc5_2 fill in the blank 30546afde038fc5_3 Cash fill in the blank 30546afde038fc5_5 fill in the blank 30546afde038fc5_6
the end of Year 1, Carrot Company revised the pension benefit formula for its defined benefit pension plan to crease benefits earned in prior years. The actuarial present value of the increased benefits is $200, the average maining service life of the employees affected by the change is 10 years, and Carrot will use the average emaining service life method for this change. Which of the following will be included in the journal entry to record this change to the pension? O Credit to prior service cost for $20 Debit to projected benefit obligation for $200 O Credit to projected benefit obligation for $20 O Debit to prior service cost for $200 O Debit to pension expense for $200
FMC Inc. provides its employees with a defined benefit pension plan. Details are as follows: $7,000,000 Present value defined benefit obligation (DBO) – December 31, 2020 $5,900,000 Plan assets - December 31, 2020 Plan's actuary confirmed that 4% is the appropriate interest rate to use. $590,000 Current service costs (CSC) for the year Past service costs (PSC) (improvement in benefits)- January 1, 2020 Expected ending DBO – December 31, 2020 Expected ending plan assets Remitted to pension trustee – evenly throughout year Payments to retirees- evenly throughout year $60,000 $7,200,000 $6,500,000 $670,000 $640,000 December 31, 2020 What journal entry should FMC prepare to record the remeasurement gains/losses and actuarial gains/losses for the year? Assume FMC reports under IFRS. DR OCI - actuarial losses a) DR OCI - losses on remeasurement of plan 200,000 assets 600,000 CR Net defined benefit liability 800,000 DR OCI - actuarial losses b) DR Net defined benefit liability 200,000 400,000…
Martin Services Company provides its employees vacation benefits and a defined contribution pension plan. Employees earned vacation pay of $43,000 for the period. The pension plan requires a contribution to the plan administrator equal to 6% of employee salaries. Salaries were $600,000 during the period. a. Provide the journal entry for the vacation pay. If an amount box does not require an entry, leave blank. b. Provide the journal entry for the pension benefit. If an amount box does not require an entry, leave it blank.
expected to retire on December 31, 2044. The employee's multiplied by the number of years in service multiplied by the final year's salary. The annual benefit is payable at the indicating a plan formula for annual benefit equal to 2% An employee was hired by the entity on January 1, 2000 and Generous Company has established a defined benefit plan Problem 17-13 (IAA) end of each year. retirement is expected to span 21 years. The employee's final salary at retirement is expected to b P800,000 and the appropriate discount rate is 8%. On January 1, 2020, 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, 2020? a. 480,960 b. 320,000 c. 160,000 d. 400,000 2. What is the projected benefit obligation…
Company A 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 1,2000 and expected to retire on December 31, 2044. 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, 2020, the plan formula was amended by increasing the percentage from 2% to 3%. The amendment was made retroactive to consider past service years. Compute for the ff: 1)PBO, Jan 1, 2020 (before amendment), Jan 1, 2020 (after amendment), Dec. 31,2020, Dec. 31, 2021 and Dec. 31 2022 2)Past service cost, 2020, 2021 and 2022 3)Current service cost, 2020, 2021 and 2022 4)Interest expense, 2020, 2021 and 2022
On January 1, 20X1, Cello Co. established a defined benefit pension plan for its employees. At January 1, 20X1, Cello estimated the service cost for 20X1 to be $45,000. At January 1, 20X2, it estimated 20X2 service cost to be $49,000. On the plan inception date, prior service credit was granted to employees for five years, the period of time between the company's formation and plan inception. The prior service cost was estimated to be $650,000 at January 1, 20X1. Cello uses a 10% discount rate and assumes a return on plan assets of 9%. The average remaining service life of employees is 20 years, and the company will fund at the end of each year an amount equal to service cost plus interest cost for 20X1 and 20X2. December 31, 20X2 20X1 PBO Benefits paid at 12/31 Fair value of plan assets 2,000 ? Contributions at 12/31 Actual return on plan assets ? 3,200 Required: 1. Compute the amount of prior service cost to be included as a component of pension expense for 20X1. 2. Compute pension…