Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Question
Chapter 19, Problem 19.10E
a.
To determine
The treatment of separate conceptual entries for the preceding information as per IFRS.
Giveninformation:
Fair value of plan assets at the beginning is $600,000.
Value of PBO at the beginning is $558,000.
Service cost is $125,800.
Settlement rate is 12%.
Expected rate on plan assets is 9%.
Actual loss on plan assets is $30,100.
Contribution for the year is $45,700.
Benefit paid for the year is $97,440.
Accumulated comprehensive income at the beginning is $42,000.
Prior service cost is $19,690.
Amortization of prior service cost is $7,000.
Actuarial gain is $8,000.
Average remaining service life of the employee base is 15 years.
b.
To determine
The value of total pension cost for the year as per IFRS.
Given information:
Fair value of plan assets at the beginning is $600,000.
Value of PBO at the beginning is $558,000.
Service cost is $125,800.
Settlement rate is 12%.
Expected rate on plan assets is 9%.
Actual loss on plan assets is $30,100.
Contribution for the year is $45,700.
Benefit paid for the year is $97,440.
Accumulated comprehensive income at the beginning is $42,000.
Prior service cost is $19,690.
Amortization of prior service cost is $7,000.
Actuarial gain is $8,000.
Average remaining service life of the employee base is 15 years.
c.
To determine
The value of closing balance of plan assets and PBO and indicate the funded status of the plan.
Given information:
Fair value of plan assets at the beginning is $600,000.
Value of PBO at the beginning is $558,000.
Service cost is $125,800.
Settlement rate is 12%.
Expected rate on plan assets is 9%.
Actual loss on plan assets is $30,100.
Contribution for the year is $45,700.
Benefit paid for the year is $97,440.
Accumulated comprehensive income at the beginning is $42,000.
Prior service cost is $19,690.
Amortization of prior service cost is $7,000.
Actuarial gain is $8,000.
Average remaining service life of the employee base is 15 years.
d.
To determine
The journal entry to record the pension cost.
Given information:
Fair value of plan assets at the beginning is $600,000.
Value of PBO at the beginning is $558,000.
Service cost is $125,800.
Settlement rate is 12%.
Expected rate on plan assets is 9%.
Actual loss on plan assets is $30,100.
Contribution for the year is $45,700.
Benefit paid for the year is $97,440.
Accumulated comprehensive income at the beginning is $42,000.
Prior service cost is $19,690.
Amortization of prior service cost is $7,000.
Actuarial gain is $8,000.
Average remaining service life of the employee base is 15 years.
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The following information relates to the pension plan for the employees of Cullumber Co.:
Accum. benefit obligation
Projected benefit obligation
Fair value of plan assets
AOCI - net (gain) or loss
Settlement rate (for year)
Expected rate of return (for year)
O $665200 gain.
O $282200 loss.
1/1/20
$110600 gain.
$272400 gain.
$8140000
8665000
7825000
-0-
$
12/31/20
8560000
9358000
9820000
(1402000 )
11%
8%
12/31/21
$ 11500000
12907000
10954000
(1570000 )
11%
Cullumber estimates that the average remaining service life is 16 years. Cullumber's contribution was $1213000 in 2021 and benefits
paid were $877000.
The unexpected gain or loss on plan assets in 2021 is
7%
SFAS No. 87, “Employers’ Accounting for Pensions,” requires an understanding of certainterms.
Discuss the following components of annual pension cost:i. Service costii. Interest costiii. Actual return on plan assetsiv. Amortization of unrecognized prior service costv. Amortization of the transition amount
1. Compute 2022 net periodic pension expense.
The 2022 records of MPS Company provided the following data related to its noncontributory,
defined benefit pension plan (amounts in PO00s):
a. Accumulated benefit obligation (report of actuary)
Beginning balance
P3,000
Service cost
1,200
Interest cost
240
Pension benefits paid
Ending balance
(400)
P4,040
Discount rate used by actuary, 8%
b. Plan assets at fair value (report of trustee):
Beginning balance
Actual return on plan assets
Contributions
P2,400
168
1,016
(400)
Pension benefits paid
Ending balance
Р3,192
Expected long-term rate of return of plan assets, 7%
c. January 1, 2022, balance of unrecognized prior service cost, gains and losses, and transaction
cost, zero.
Chapter 19 Solutions
Intermediate Accounting
Ch. 19 - What is the allocation period used to expense...Ch. 19 - How do companies account for stock-based...Ch. 19 - Do companies with equity-based compensation plans...Ch. 19 - When accounting for employee stock options, will a...Ch. 19 - Prob. 19.5QCh. 19 - Prob. 19.6QCh. 19 - Prob. 19.7QCh. 19 - Prob. 19.8QCh. 19 - Prob. 19.9QCh. 19 - Prob. 19.10Q
Ch. 19 - Prob. 19.1MCCh. 19 - Prob. 19.2MCCh. 19 - Prob. 19.3MCCh. 19 - Prob. 19.4MCCh. 19 - Prob. 19.5MCCh. 19 - Prob. 19.6MCCh. 19 - Prob. 19.7MCCh. 19 - Prob. 19.8MCCh. 19 - Prob. 19.1BECh. 19 - Prob. 19.2BECh. 19 - Prob. 19.3BECh. 19 - Prob. 19.4BECh. 19 - Prob. 19.5BECh. 19 - Prob. 19.6BECh. 19 - Employee Stock Options, Liability-Classified...Ch. 19 - Prob. 19.8BECh. 19 - Prob. 19.9BECh. 19 - Prob. 19.10BECh. 19 - Prob. 19.11BECh. 19 - Prob. 19.12BECh. 19 - Prob. 19.13BECh. 19 - Prob. 19.14BECh. 19 - Prob. 19.15BECh. 19 - Prob. 19.16BECh. 19 - Prob. 19.17BECh. 19 - Prob. 19.18BECh. 19 - Prob. 19.19BECh. 19 - Prob. 19.20BECh. 19 - Prob. 19.21BECh. 19 - Prob. 19.22BECh. 19 - Prob. 19.23BECh. 19 - Prob. 19.24BECh. 19 - Prob. 19.25BECh. 19 - Prob. 19.26BECh. 19 - Prob. 19.27BECh. 19 - Prob. 19.28BECh. 19 - Prob. 19.1ECh. 19 - Prob. 19.2ECh. 19 - Employee Stock Options. Equity-Classified Awards....Ch. 19 - Prob. 19.4ECh. 19 - Prob. 19.5ECh. 19 - Prob. 19.6ECh. 19 - Prob. 19.7ECh. 19 - Prob. 19.8ECh. 19 - Prob. 19.9ECh. 19 - Prob. 19.10ECh. 19 - Prob. 19.11ECh. 19 - Prob. 19.12ECh. 19 - Prob. 19.13ECh. 19 - Prob. 19.14ECh. 19 - Prob. 19.15ECh. 19 - Prob. 19.16ECh. 19 - Prob. 19.1PCh. 19 - Prob. 19.2PCh. 19 - Prob. 19.3PCh. 19 - Prob. 19.4PCh. 19 - Prob. 19.5PCh. 19 - Prob. 19.6PCh. 19 - Prob. 19.7PCh. 19 - Prob. 19.8PCh. 19 - Prob. 19.9PCh. 19 - Prob. 19.10PCh. 19 - Prob. 19.11PCh. 19 - Prob. 19.12PCh. 19 - Prob. 1JCCh. 19 - Prob. 2FSCCh. 19 - Prob. 1SSCCh. 19 - Prob. 2SSCCh. 19 - Basis for Conclusions Case 1: Are Employee Stock...Ch. 19 - Prob. 2BCC
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