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 800,000 b) DR OCI — actuarial losses 200,000 DR Net defined benefit liability 400,000 CR OCI — gains on remeasurement of plan assets 600,000 c) DR Net defined benefit liability 800,000 CR OCI — actuarial gains 200,000 CR OCI — gains on remeasurement of plan assets 600,000 d) DR OCI — losses on remeasurement of plan assets 600,000 CR OCI — actuarial gains 200,000 CR Net defined benefit liability 400,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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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:

DR OCI — actuarial losses	200,000
DR OCI — losses on remeasurement of plan assets	600,000
CR Net defined benefit liability		800,000

DR OCI — actuarial losses	200,000
DR Net defined benefit liability	400,000
CR OCI — gains on remeasurement of plan assets		600,000

DR Net defined benefit liability	800,000
CR OCI — actuarial gains		200,000
CR OCI — gains on remeasurement of plan assets		600,000

DR OCI — losses on remeasurement of plan assets	600,000
CR OCI — actuarial gains		200,000
CR Net defined benefit liability		400,000

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