The following information is taken from the actuarial valuation report of Daddy, Inc.'s defined benefit plan: Fair value of plan assets, Jan. 1 Present value of defined benefit obligation, Jan. 1 Past service cost from plan amendment during the year (the vesting period is 5 yrs.) u Current service cost 2,100,000 2,400,000 300,000 600,000 Benefits paid to retirees during the year Actuarial gain during the period Return on plan assets during the period Contributions to the fund during the year Discount rate based on high quality corporate bonds 450,000 15,000 270,000 0000 480,000 12% Requirements: a. Determine net defined benefit liability/asset as of Jan. 1, 20x1 and Dec. 31, 20x1, respectively. b. Compute for the defined benefit cost in 20x1, showing amoúnts recognized in P/L and OCI, respectively. c. Provide the journal entries in 20x1. d Prepare a reconciliation of the beginning and ending balances of net defined benefit liability/asset.

The following information is taken from the actuarial valuation report of Daddy, Inc.'s defined benefit plan: Fair value of plan assets, Jan. 1 Present value of defined benefit obligation, Jan. 1 Past service cost from plan amendment during the year (the vesting period is 5 yrs.) u Current service cost 2,100,000 2,400,000 300,000 600,000 Benefits paid to retirees during the year Actuarial gain during the period Return on plan assets during the period Contributions to the fund during the year Discount rate based on high quality corporate bonds 450,000 15,000 270,000 0000 480,000 12% Requirements: a. Determine net defined benefit liability/asset as of Jan. 1, 20x1 and Dec. 31, 20x1, respectively. b. Compute for the defined benefit cost in 20x1, showing amoúnts recognized in P/L and OCI, respectively. c. Provide the journal entries in 20x1. d Prepare a reconciliation of the beginning and ending balances of net defined benefit liability/asset.

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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Concept explainers

Employee Benefits

In an organization employees are the most important resource and most important asset. They can lead an organization to the sky or can be the reason for unsuccessful of business. Therefore, it is very much important that employees of an organization should be satisfied by the environment of the organization and most importantly with the salary, wages incentives, etc.

Question

d. Prepare a reconciliation of the beginning and ending balances
The following information is taken from the actuarial valuation
report of Daddy, Inc.'s defined benefit plan:
Fair value of plan assets, Jan. 1
Present value of defined benefit obligation, Jan. 1
Past service cost from plan amendment during the year
(the vesting period is 5 yrs.)es
2,100,000
2,400,000
300,000
Current service cost
600,000
Benefits paid to retirees during the
Actuarial gain during the period
Return on plan assets during the period
Contributions to the fund during the year
Discount rate based on high quality corporate bonds
year
450,000
15,000
270,000
480,000
12%
Requirements:
a. Determine net defined benefit liability/asset as of Jan. 1, 20x1
and Dec. 31, 20x1, respectively.
b. Compute for the defined benefit cost in 20x1, showing
amoúnts recognized in P/L and OCI, respectively.
c. Provide the journal entries in 20x1.
Prepare a reconciliation of the beginning and ending balances
с.
d.
of net defined benefit liability/asset.

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Subject: acounting