Problem 1: The following selected post-retirement benefit accounts were lifted from the 2021 unadjusted trial balance of EMM Corp. No adjusting entry had been made yet at year end in relation to the post- retirement benefits related accounts. Prepaid Pension Expense, January 1, 2021 Pension expense for 2021, amount contributed to the plan P ℗ Additional information: The memorandum account balances and other off-books transactions are as follows: Plan asset at fair market value, January 1, 2021 Accumulated benefit obligation at present value, January 1, 2021 Payments to retirees at scheduled retirement in 2021 Payments to early retirees (settlement price) in 2021 Carrying value of accrued benefits of early retirees in 2021 Current service cost Past service cost recognized in the current year Settlement rate 493,900 500,000 Plan asset at fair market value, December 31, 2021 Accumulated benefit obligation at present value, December 31, 2021 3,245,400 ℗ 2,751,500 P 350,000 ▸ 300,000 ℗ 220,000 ▸ 535,000 ℗ 275,000 12% 3,569,900 3,852,100 There had been no remeasurement (actuarial) gain or loss from plan asset and accumulated retirement obligation in the prior years. Required: 1. What is the total pension expense in 2021? 2. How much from the pension expense is recognized in the 2021 profit or loss? 3. How much from the pension expense is recognized in the 2021 other comprehensive income or loss? 4. What is the prepaid (accrued) pension expense as of December 31, 2021?
Problem 1: The following selected post-retirement benefit accounts were lifted from the 2021 unadjusted trial balance of EMM Corp. No adjusting entry had been made yet at year end in relation to the post- retirement benefits related accounts. Prepaid Pension Expense, January 1, 2021 Pension expense for 2021, amount contributed to the plan P ℗ Additional information: The memorandum account balances and other off-books transactions are as follows: Plan asset at fair market value, January 1, 2021 Accumulated benefit obligation at present value, January 1, 2021 Payments to retirees at scheduled retirement in 2021 Payments to early retirees (settlement price) in 2021 Carrying value of accrued benefits of early retirees in 2021 Current service cost Past service cost recognized in the current year Settlement rate 493,900 500,000 Plan asset at fair market value, December 31, 2021 Accumulated benefit obligation at present value, December 31, 2021 3,245,400 ℗ 2,751,500 P 350,000 ▸ 300,000 ℗ 220,000 ▸ 535,000 ℗ 275,000 12% 3,569,900 3,852,100 There had been no remeasurement (actuarial) gain or loss from plan asset and accumulated retirement obligation in the prior years. Required: 1. What is the total pension expense in 2021? 2. How much from the pension expense is recognized in the 2021 profit or loss? 3. How much from the pension expense is recognized in the 2021 other comprehensive income or loss? 4. What is the prepaid (accrued) pension expense as of December 31, 2021?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 1:
The following selected post-retirement benefit accounts were lifted from the 2021 unadjusted trial
balance of EMM Corp. No adjusting entry had been made yet at year end in relation to the post-
retirement benefits related accounts.
Prepaid Pension Expense, January 1, 2021
Pension expense for 2021, amount contributed to the plan
493,900
500,000
Additional information:
The memorandum account balances and other off-books transactions are as follows:
Plan asset at fair market value, January 1, 2021
Accumulated benefit obligation at present value, January 1, 2021
Payments to retirees at scheduled retirement in 2021
Payments to early retirees (settlement price) in 2021
Carrying value of accrued benefits of early retirees in 2021
P 3,245,400
P 2,751,500
P 350,000
P 300,000
P 220,000
P 535,000
P 275,000
Current service cost
Past service cost recognized in the current year
Settlement rate
12%
Plan asset at fair market value, December 31, 2021
Accumulated benefit obligation at present value, December 31, 2021 P 3,852,100
P 3,569,900
There had been no remeasurement (actuarial) gain or loss from plan asset and accumulated
retirement obligation in the prior years.
Required:
1. What is the total pension expense in 2021?
2. How much from the pension expense is recognized in the 2021 profit or loss?
3. How much from the pension expense is recognized in the 2021 other comprehensive
income or loss?
4. What is the prepaid(accrued) pension expense as of December 31, 2021?
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