Required: a. Prepare journal entries for the past service cost for the years ending December 31, 2020, and December 31, 2021, under (1) IFRS and (2) U.S. GAAP. b. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020, and December 31, 2021, conversion worksheets to convert IFRS balances to U.S. GAAP. Answer is complete but not entirely correct.

Required: a. Prepare journal entries for the past service cost for the years ending December 31, 2020, and December 31, 2021, under (1) IFRS and (2) U.S. GAAP. b. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020, and December 31, 2021, conversion worksheets to convert IFRS balances to U.S. GAAP. Answer is complete but not entirely correct.

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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Question

On January 1, 2020, Xiamen Company made amendments to its defined benefit pension plan that resulted in 61,400 yuan of past
service cost. The plan has 5,280 active employees with an average expected remaining working life of 10 years. There currently are
no retirees under the plan.
SE
Assume that Xiamen Company is a foreign company using IFRS and is owned by a company using US GAAP Thus, IFRS balances
must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes.
Required:
a. Prepare journal entries for the past service cost for the years ending December 31, 2020, and December 31, 2021, under (1) IFRS
and (2) U.S. GAAP.
b. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020, and December 31, 2021, conversion worksheets
to convert IFRS balances to U.S. GAAP

Required:
a. Prepare journal entries for the past service cost for the years ending December 31, 2020, and December 31, 2021, under (1) IFRS
and (2) U.S. GAAP.
b. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020, and December 31, 2021, conversion worksheets
to convert IFRS balances to U.S. GAAP.
Complete this question by entering your answers in the tabs below.
Required A Required B
Prepare the entry (ies) that the U.S. parent would make on the December 31, 2020, and December 31, 2021, conversion
worksheets to convert IFRS balances to U.S. GAAP. (If no entry is required for a transaction/event, select "No journal entry
required" in the first account field.)
No
1
2
Answer is complete but not entirely correct.
Date
12/31/2020
12/31/2021
General Journal
Deferred past service cost (AOCI)
Past service cost expense
Accumulated other comprehensive income
Retained earnings
33
Debit
6,140 X
6,140
Credit
6,140
6,140

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