Pension Question Sophia Consultants Inc. has had a defined benefit pension plan since January 1, 2018. The following represents beginning balances as at January 1, 2022: Plan Asset $1,155,300; Defined Benefit Obligation $1,275,000; Net Pension Liability $119,700 Additional Information is as follows for 2022: Current Service cost is $186,000 for 2022 Company Funding/Contribution is $200,000 for 2022. Funding is made on December 31 of each year. Actual return on assets is $55,900 for 2022. There is an increase in obligation for $29,000 due to changes in Actuarial assumptions at Dec 31, 2022. There are payments made equal to $80,000 per year to retired employees in 2022 (payments to retirees are made at the end of the year on December 31). Past service cost of $85,900 from plan amendment dated December 31, 2022: liability is increased because benefits were increased on a retroactive basis. For 2022, the assumed interest rate is 6%. Assume IFRS. Required: 1. Determine Defined Benefit Obligation, Pension Asset, Pension Expense, AOCI, and Net Pension Asset/Liability for 2022. Prepare a spreadsheet to determine all these pension items. 2. Prepare the required journal entries for 2022. 3. Prepare a partial balance sheet and a partial income statement for 2022.
Pension Question Sophia Consultants Inc. has had a defined benefit pension plan since January 1, 2018. The following represents beginning balances as at January 1, 2022: Plan Asset $1,155,300; Defined Benefit Obligation $1,275,000; Net Pension Liability $119,700 Additional Information is as follows for 2022: Current Service cost is $186,000 for 2022 Company Funding/Contribution is $200,000 for 2022. Funding is made on December 31 of each year. Actual return on assets is $55,900 for 2022. There is an increase in obligation for $29,000 due to changes in Actuarial assumptions at Dec 31, 2022. There are payments made equal to $80,000 per year to retired employees in 2022 (payments to retirees are made at the end of the year on December 31). Past service cost of $85,900 from plan amendment dated December 31, 2022: liability is increased because benefits were increased on a retroactive basis. For 2022, the assumed interest rate is 6%. Assume IFRS. Required: 1. Determine Defined Benefit Obligation, Pension Asset, Pension Expense, AOCI, and Net Pension Asset/Liability for 2022. Prepare a spreadsheet to determine all these pension items. 2. Prepare the required journal entries for 2022. 3. Prepare a partial balance sheet and a partial income statement for 2022.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Pension Question
Sophia Consultants Inc. has had a defined benefit pension plan since January 1, 2018.
The following represents beginning balances as at January 1, 2022:
Plan Asset $1,155,300; Defined Benefit Obligation $1,275,000; Net Pension Liability $119,700
Additional Information is as follows for 2022:
Current Service cost is $186,000 for 2022
Company Funding/Contribution is $200,000 for 2022. Funding is made on December 31 of each year.
Actual return on assets is $55,900 for 2022.
There is an increase in obligation for $29,000 due to changes in Actuarial assumptions at Dec 31, 2022.
There are payments made equal to $80,000 per year to retired employees in 2022 (payments to retirees
are made at the end of the year on December 31).
Past service cost of $85,900 from plan amendment dated December 31, 2022: liability is increased
because benefits were increased on a retroactive basis.
For 2022, the assumed interest rate is 6%. Assume IFRS.
Required:
1. Determine Defined Benefit Obligation, Pension Asset, Pension Expense, AOCI, and Net
Pension Asset/Liability for 2022. Prepare a spreadsheet to determine all these pension items.
2. Prepare the required journal entries for 2022.
3. Prepare a partial balance sheet and a partial income statement for 2022.
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