On September 1, 2021, Di Lion 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, 2021. Actual or reasonably estimated amounts at December 31, 2021 relating to the employees accepting the offer are as follows: A. Lump-sum payments totaling P475,000 were made on January
On September 1, 2021, Di Lion 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, 2021. Actual or reasonably estimated amounts at December 31, 2021 relating to the employees accepting the offer are as follows: A. Lump-sum payments totaling P475,000 were made on January
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On September 1, 2021, Di Lion 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, 2021. Actual or reasonably estimated amounts at December 31, 2021 relating to the employees accepting the offer are as follows:
A. Lump-sum payments totaling P475,000 were made on January 1, 2022.
B. Periodic payments totaling P60,000 annually for 3 years will begin January 1, 2023. The present value at December 31, 2011 of these payments was P155,000.
C. Reduction of accrued pension costs at December 31, 2021 of these payments was P45,000.
A. Lump-sum payments totaling P475,000 were made on January 1, 2022.
B. Periodic payments totaling P60,000 annually for 3 years will begin January 1, 2023. The present value at December 31, 2011 of these payments was P155,000.
C. Reduction of accrued pension costs at December 31, 2021 of these payments was P45,000.
a. At December 31, 2021, Di Lion should report a total liability for special termination benefits of:
b. What amount should be reported as loss on termination benefits in 2021?
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