Fernando's Furniture Inc. sponsors a defined benefit pension plan for its employees. The plan'strustee reports the following information for calendar 2023:Defined benefit obligation, January 1Fair value of plan assets, January 1.....Current service cost.........$240,000180,00080,000Actual and expected return on plan assets....21,000Contributions.70,000Benefits paid to retirees.120,000Interest (discount) rate.....10%Past service costs (as of January 1).10,000…………….The corporation uses ASPE.Instructionsa)Calculate the amount of the defined benefit expense for 2023, and prepare the required adjustingentries.b) Calculate the surplus or deficit of the plan on December 31, 2023.

Pension Expense-Pension expense for a company with a defined benefit pension plan is the total of…

Answered: Instructions a) Calculate the amount of…

Instructions a) Calculate the amount of the defined benefit expense for 2023, and prepare the required adjusting entries. b) Calculate the surplus or deficit of the plan on December 31, 2023.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 5E

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Question

Fernando's Furniture Inc. sponsors a defined benefit pension plan for its employees. The plan's
trustee reports the following information for calendar 2023:
Defined benefit obligation, January 1
Fair value of plan assets, January 1.....
Current service cost.........
$240,000
180,000
80,000
Actual and expected return on plan assets
....21,000
Contributions
.70,000
Benefits paid to retirees.
120,000
Interest (discount) rate.....
10%
Past service costs (as of January 1).
10,000
…………….
The corporation uses ASPE.
Instructions
a)
Calculate the amount of the defined benefit expense for 2023, and prepare the required adjusting
entries.
b) Calculate the surplus or deficit of the plan on December 31, 2023.

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