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 2 years ago
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