Question
In: Accounting
Presented below is information related to Kiwi Ltd. for calendar 2020. The corporation uses IFRS. Defined...
Presented below is information related to Kiwi Ltd. for calendar
2020. The corporation uses IFRS.
| Defined benefit obligation, Jan 1...................... | $720,000 | ||
| Fair value of plan assets, Jan 1........................ | 700,000 | ||
| Current service cost......................................... | 90,000 | ||
| Contributions to plan....................................... | 125,000 | ||
| Actual and expected return on plan assets...... | 56,000 | ||
| Past service costs (effective Jan 1).................. | 10,000 | ||
| Benefits paid to retirees.................................. | 96,000 | ||
| Interest (discount) rate.................................... | 9% |
The pension expense to be reported for 2020 is:
A) $108,800 B) $60,000 C) $140,000 D) $109,700
The balance of the defined benefit obligation at December 31, 2020 is
A) $779,700
B) $789,700
C) $778,800
D) $724,000
The fair value of the plan assets at December 31, 2020 is
|
$875,000. |
|
$819,000. |
|
$785,000. |
|
$805,000. |
Solutions
Expert Solution
| Items | Annual pension expense | Cash | AOCI-PSC | OCI Gain | Pension asset/liability | Projected benefit obligation | Plan assets | |||||||
| Amount | Dr/cr | Amount | Dr/cr | Amount | Dr/cr | Amount | Dr/cr | Amount | Dr/cr | Amount | Dr/cr | Amount | Dr/cr | |
| Balance Jan 1, 2020 | - | Dr | - | Dr | 20,000 | Cr | 720,000 | Cr | 700,000 | Dr | ||||
| Service cost | 90,000 | Dr | 90,000 | Cr | 90,000 | Cr | ||||||||
| Interest cost | 64,800 | Dr | 64,800 | Cr | 64,800 | Cr | ||||||||
| PSC amortisation | - | Dr | Cr | |||||||||||
| Return on plan assets | 56,000 | Cr | - | Cr | 56,000 | Dr | 56,000 | Dr | ||||||
| OCI Gain amortisation | - | Dr | - | Cr | ||||||||||
| New prior service cost | 10,000 | Dr | 10,000 | Dr | - | Dr | - | Cr | ||||||
| Loss due to change in acturial assumptions | Dr | - | Cr | |||||||||||
| Contributions | 125,000 | Cr | 125,000 | Dr | 125,000 | Dr | ||||||||
| Benefits paid | 96,000 | Dr | 96,000 | Cr | ||||||||||
| Jounral for 2020 | 108,800 | Dr | 125,000 | Cr | 10,000 | Dr | - | Cr | 26,200 | Dr | 58,800 | Cr | 85,000 | Dr |
| Opening balance Jan 1, 2020 | - | Dr | - | Dr | 20,000 | Cr | 720,000 | Cr | 700,000 | Dr | ||||
| Balance Dec 31, 2020 | 10,000 | Dr | - | Cr | 6,200 | Dr | 778,800 | Cr | 785,000 | Dr |
Answer is:
Pension expense: 108800
The balance of the defined benefit obligation at December 31, 2020 is
778,800
Fair value of plan assets is:
785,000
please rate.
ekkarill92 answered 1 year agoRelated Solutions
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