Oyster Corporation is a publicly traded company that follows IFRS. On December 31, 2019, Oyster's financial records indicated the following information related to the company's defined benefit pension plan: Defined Benefit Obligation $3,726,000 Pension Plan Assets $3,726,000 On July 1, 2020, Oyster acquired the operations of Latch Ltd. As one of the conditions of the purchase, Oyster agreed that Latch's employees would be included in Oyster's defined benefit pension plan and would be granted credit for the past service of Latch's employees. The actuary estimated the value of the prior service amount granted on July 1, 2020, to be $202,000. Oyster's actuary provided the following information on December 31, 2020: Current year service cost $913,000 Employer contributions for the year $964,000 Benefits paid to retirees $308,000 Actuarial increase in pension obligations $53,000 Discount rate 6% Actual return on assets 4% A) Prepare a pension worksheet for Oyster Corporation for the year ending December 31, 2020. B) Prepare the journal entry to record the pension expense for 2020.

Oyster Corporation is a publicly traded company that follows IFRS. On December 31, 2019, Oyster's financial records indicated the following information related to the company's defined benefit pension plan: Defined Benefit Obligation $3,726,000 Pension Plan Assets $3,726,000 On July 1, 2020, Oyster acquired the operations of Latch Ltd. As one of the conditions of the purchase, Oyster agreed that Latch's employees would be included in Oyster's defined benefit pension plan and would be granted credit for the past service of Latch's employees. The actuary estimated the value of the prior service amount granted on July 1, 2020, to be $202,000. Oyster's actuary provided the following information on December 31, 2020: Current year service cost $913,000 Employer contributions for the year $964,000 Benefits paid to retirees $308,000 Actuarial increase in pension obligations $53,000 Discount rate 6% Actual return on assets 4% A) Prepare a pension worksheet for Oyster Corporation for the year ending December 31, 2020. B) Prepare the journal entry to record the pension expense for 2020.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On January 1, 2019, Uncle Company purchased 80 percent of Nephew Company's capital stock for $510,000 in cash and other assets. Nephew had a book value of $617,500, and the 20 percent noncontrolling interest fair value was $127,500 on that date. On January 1, 2021, Nephew had acquired 30 percent of Uncle for $330,250. Uncle's appropriately adjusted book value as of that date was $1,067,500. Separate operating income figures (not including investment income) for these two companies follow. In addition, Uncle declares and pays $20,000 in dividends to shareholders each year and Nephew distributes $5,000 annually. Any excess fair-value allocations are amortized over a 10-year period. Uncle Year Company 2019 $ 92,000 2020 2021 159,000 167,000 a. b. Nephew Company $ 31,800 48,400 51,400 a. Assume that Uncle applies the equity method to account for this investment in Nephew. What is the subsidiary's income recognized by Uncle in 2021? b. What is the net income attributable to the…
On January 1, 2020, GALANTY Company granted XYZ, its president 20,000 share appreciation rights for past services. These rights are exercisable immediately and expire on January 1, 2022. During exercise, XYZ is entitled to receive cash for the excess of the share market price on the exercise date over the market price on the grant date. XYZ did not exercise any of the rights during 2020. The market price of GALANTY’s share was P30 on January 1, 2020 and P45 on December 31, 2020. As a result of the share appreciation rights, GALANTY should recognize compensation expense for 2020 of?
Santo, Inc. acquired 30% of Nino Corp's voting stock on January 1, 2019 for P360,000. During 2019, Nino earned P150,000 and paid dividends of P90,000. Santo's 30% interest in Nino gives Santo the ability to exercise significant influence over Nino's operating and financial policies. During 2020, Nino earned P180,000 and paid dividends of P60,000 on April 1 and P60,000 on October 1. On July 1, 2020, Santo sold half of its stock in Nino for its fair value of P237,000. Thereafter, Santo, Inc. designated the investment as FVTOCI. The remaining shares of Nino Corp. held by Santo, Inc. have a fair value of P220,000 at December 31, 2020. How much is the total amount to be recognized in Santo, Inc.s 2020 profit or loss related to this investment? O P87.000 O P114.000 O P158,500 O P123.000
On January 1, 2020, Cecilia Company purchased a patent from an original patentee for P2,400,000. The remaining legal life of the patent is 15 years but the useful life is only 12 years. On January 1, 2021, the entity paid P550,000 in successfully defending the patent in an infringement suit filed against the entity. On January 1, 2022, the entity acquired a competing patent for P1,500,000. The competing patent has a remaining legal life of 15 years but it is not to be used because it was intended to protect the original patent. What is the carrying amount of the patent on December 31, 2022? А. 3,150,000 B. 3,600,000 С. 3,200,000 D. 3,500,000
Jennica Company purchased a life insurance policy on its president, of which the entity is the beneficiary. The entity provided the following information for 2022: Cash surrender value - January 1 90,000 Cash surrender value – December 31 110,000 80,000 Annual premium paid on January 1 During 2022, dividend of P5,000 was applied to increase the cash surrender value of the policy. What amount should be reported as life insurance expense for 2022? A. 80,000 В. 60,000 C. 55,000 D. 65,000
Cullumber Corporation is a privately-owned company that follows ASPE. On December 31, 2022, Cullumber's financial records indicated the following information related to the company's defined benefit pension plan: Defined Benefit Obligation Pension Plan Assets $7,515,000 7,322,000 On January 1, 2023, Cullumber acquired the operations of Blossom Ltd. As one of the conditions of the purchase, Cullumber agreed that Blossom's employees would be included in Cullumber's defined benefit pension plan and would be granted credit for the past service of Blossom's employees. The actuary estimated the value of the prior service amount granted on January 1, 2023 to be $312,500. Cullumber's actuary provided the following information on December 31, 2023: Current year service cost $376,000 Employer contributions for the year 443,300 Benefits paid to retirees 183,900 Actuarial increase in pension obligations 112,900 Expected return on assets 6% Actual return on assets 5% Discount rate 6% (a) Prepare a…
Kyle, a single taxpayer, worked as a freelance software engineer for the first three months of 2023. During that time, he earned $74,000 of self-employment income. On April 1, 2023, Kyle took a job as a full-time software engineer with one of his former clients, Hoogle Incorporated From April through the end of the year, Kyle earned $168,000 in salary. What amount of FICA taxes (self-employment and employment related) does Kyle owe for the year? Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Self-employment/FICA tax
Ditsapelo Unlimited on 1 January 2024 granted 300 share appreciation rights (SARs) to each of its 200 employees on the condition that they continue to work for the entity for two years. At 1 January 2024, the entity expects that 50 of those employees will leave each year
On December 31, 2019, Akron, Inc., purchased 5 percent of Zip Company's common shares on the open market in exchange for $15,500. On December 31, 2020, Akron, Inc., acquires an additional 25 percent of Zip Company's outstanding common stock for $94,000. During the next two years, the following information is available for Zip Company: Common Stock Fair Value (12/31) $321,000 376,000 478,000 Dividends Income Declared 2019 $79,000 89,000 $6,200 15,800 2020 2021 At December 31, 2020, Zip reports a net book value of $280,000. Akron attributed any excess of its 30 percent share of Zip's fair over book value to its share of Zip's franchise agreements. The franchise agreements had a remaining life of 10 years at December 31, 2020. a. Assume Akron applies the equity method to its Investment in Zip account: 1. What amount of equity income should Akron report for 2021? 2. On Akron's December 31, 2021, balance sheet, what amount is reported for the Investment in Zip account? b. Assume Akron uses…
Several years ago. PEPA Company purchased a P3,000,000 ordinary life insurance policy on its president and the company is the named beneficiary. Additional data are available for the year ended December 31, 2020.Cash surrender value of life insurance, December 31, 2020 - P117,000 Annual premium paid in advance on January 1, 2020 - P50,000 Life insurance expense recognized in the statement of comprehensive income for the year ended December 31, 2020 - P38,000How much must have been the cash surrender value of life insurance at PEPA's December 31. 2020 financial statements? a. P 12,000 b. P117,000 c. P129,000 d. P105,000
Atif purchased on January 1, 2019, as a held-for-collection investment, OMR 75,000 of the 8%, 5-year bonds of Sohar Plc. for OMR 81,398, which provides a 6% return. The bonds pay interest semiannually. Prepare Atif’s journal entries for: (a) the purchase of the investment, and (b) the receipt of semiannual interest and premium amortization.
Sandhill Inc. owns shares of Teal Corporation stock. At December 31, 2020, the securities were carried in Sandhill's accounting records at their cost of $916,000, which equals their fair value. On September 21, 2021, when the fair value of the securities was $974,000, Sandhill declared a property dividend whereby the Teal securities are to be distributed on October 23, 2021, to stockholders of record on October 8, 2021. Prepare all journal entries necessary on those three dates. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date + ♦ Account Titles and Explanation (To record gain or loss) (To record property dividend) Debit Credit