Question

Huntley Corp. provides the following information about its pension plan for the year 2021:

                                                                                                                           2021

Fair value of plan assets, first of year $134,100

Defined benefit obligation (DBO) (assumed

To equal the ABO for funding purposes under ASPE), first of year 212,700

Current service cost for year                                                                               13,000

Interest or discount rate on the DBO/plan assets                                                  10%

Actual earnings on plan assets for year                                                                12,000

Employer contributions for year (funding), September 31, 2021                        24,000

Benefits paid to retirees by trustee for year                                                         10,500

Actuarial loss due to change in actuarial assumptions                                         28,530

Plan assets, end of year                                                                                      159,600

DBO, end of year                                                                                             265,000

Funded status, end of year – over- or (under)- funded                                   (105,400)

Instructions

1. Prepare a pension worksheet and general journal entries under IFRS for 2021. (7 points)
2. Prepare a pension worksheet and general journal entries under ASPE (the Immediate Recognition approach) for 2021. (7 points)

Answer 1

Huntley Corp
Pension Worksheet-IFRS
Items	Annual Pension Expense	Cash	OCI-Prior Service Cost	OCI-Gain/(Loss)	Pension Asset/liability	Projected benefit obligation	Plan Asset
Balance, Jan 1,2021			$                     -		$    (78,600.00)	$     (212,700.00)	$    134,100.00
Service Cost	$      13,000.00					$       (13,000.00)
Interest Cost	$      21,270.00					$       (21,270.00)
Actual return	$    (12,000.00)						$      12,000.00
Unexpected gain	$      (1,410.00)			$      (1,410.00)			$                     -
Amortisation of PSC	$                     -		$                     -
Liability increases				$    (28,530.00)		$       (28,530.00)
Contributions		$ (24,000.00)					$      24,000.00
Benefits						$          10,500.00	$    (10,500.00)
Journal entry for 2020	$      20,860.00	$ (24,000.00)	$                     -	$    (29,940.00)	$    (26,800.00)	$       (52,300.00)	$      25,500.00
Accumulated OCI dec 31, 2020			$                     -	$                     -	$    (78,600.00)	$     (212,700.00)	$    134,100.00
Balance, December 31, 2021			$                     -	$    (29,940.00)	$ (105,400.00)	$     (265,000.00)	$    159,600.00
Net Pension Expense for 2020	$      20,860.00
Journal entry 31-12-2021(IFRS)
Account title & explaination	Debit	Credit
Pension Expense	$      20,860.00
OCI(Gain/loss)	$      29,940.00
Cash		$   24,000.00
Net Pension Asset/liability		$   26,800.00
(Being pension expense and remeasurement loss recorded)
Huntley Corp
Pension Worksheet-ASPE
Items	Annual Pension Expense	Cash	Pension Asset/liability	Projected benefit obligation	Plan Asset
Balance, Jan 1,2021			$    (78,600.00)	$ (212,700.00)	$    134,100.00
Service Cost	$      13,000.00			$    (13,000.00)
Interest Cost	$      21,270.00			$    (21,270.00)
Expected return	$    (13,410.00)				$      13,410.00
Unexpected loss	$        1,410.00				$      (1,410.00)
Amortisation of PSC	$                     -
Liability increases	$      28,530.00			$    (28,530.00)
Contributions		$ (24,000.00)			$      24,000.00
Benefits				$      10,500.00	$    (10,500.00)
Journal entry for 2021	$      50,800.00	$ (24,000.00)	$    (26,800.00)	$    (52,300.00)	$      25,500.00
Accumulated dec 31, 2020			$    (78,600.00)	$ (212,700.00)	$    134,100.00
Balance, December 31, 2021			$ (105,400.00)	$ (265,000.00)	$    159,600.00
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