On September 1, 2020, Reality Corporation offered special termination benefits to employees who had reached the early retirement age specified in the company's pension plan. The termination benefits consisted of lump sum and periodic future payments. Additionally, the employees accepting the company offer receive the usual early retirement pension benefits. The offer expired on November 30, 2020. Actual or reasonably estimated amounts on December 31, 2020 relating to the employees accepting the offer are as follows: Lump sum payments made 475,000 on January 1, 2021 Present value of periodic payments 155,000 of P60,000 annually for 3 years which will begin January 1, 2021 Reduction of accrued pension cost on 45,000 December 31, 2020 for the terminating employees What amount should Possible Corporation report as total liability for termination benefits on December 31, 2020?

On September 1, 2020, Reality Corporation offered special termination benefits to employees who had reached the early retirement age specified in the company's pension plan. The termination benefits consisted of lump sum and periodic future payments. Additionally, the employees accepting the company offer receive the usual early retirement pension benefits. The offer expired on November 30, 2020. Actual or reasonably estimated amounts on December 31, 2020 relating to the employees accepting the offer are as follows: Lump sum payments made 475,000 on January 1, 2021 Present value of periodic payments 155,000 of P60,000 annually for 3 years which will begin January 1, 2021 Reduction of accrued pension cost on 45,000 December 31, 2020 for the terminating employees What amount should Possible Corporation report as total liability for termination benefits on December 31, 2020?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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