Zee Bhd operates a defined benefit plan for its employees since its incorporation in 2003. The...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Zee Bhd operates a defined benefit plan for its employees since its incorporation in 2003. The management of Zee Bhd has agreed on the following valuations regarding the scheme: Fair value of plan asset RM Defined benefit obligation RM 1 January 2013 9,405,000 9,900,000 31 December 2013 10,810,800 11,295,900 On 1 January 2013, the company increased the benefit to the employees by 1.5% of the final drawn salary for each year of service beginning on 1 February 2004. Based on actuarial valuations, past service cost incurred from 1 February 2004 to 1 January 2013, as a result of the improvement in the benefit, were RM 1,320,000 (vested) and RM1,056,000 (unvested). The average period to vesting is 4 years. The actuarial valuations also showed that Zee Bhd would incur a current service cost of RM1,287,000 for the year ended 31 December 2013. Contributions paid to the benefit plan during the year amounted to RM891,000 and benefits paid to retired employees were RM1,485,000 The annual discount rate used by the company is 10% whilst the expected rate of return is 12% per annum. The expected average remaining working lives of the employees participating in the defined benefit plan were 12 years. As at 31 December 2013, it was determined that the actuarial gains from the plan assets was RM871,200 and the remeasurement gain was RM2,831,400. Required: a. Other than post-employment benefits, MFRS 119 Employee Benefits also covers the accounting treatment of termination benefits. Explain the accounting treatment of termination benefits. (5 marks) b. Compute the actuarial gain or loss arising from the defined benefit obligation for the year ended 31 December 2013. (4 marks) c. Compute the defined benefit costs to be recognized in profit or loss for the year ended 31 December 2013. (3 marks) d. Analyze the remeasurement gain for the year ended 31 December 2013 into its components. e. If the Employees Provident Fund (EPF). a defined contribution plan. provides an annual return of 12.5%, explain one (1) reason why an employee of Zee Bhd should also participate in the company's defined benefit plan. Zee Bhd operates a defined benefit plan for its employees since its incorporation in 2003. The management of Zee Bhd has agreed on the following valuations regarding the scheme: Fair value of plan asset RM Defined benefit obligation RM 1 January 2013 9,405,000 9,900,000 31 December 2013 10,810,800 11,295,900 On 1 January 2013, the company increased the benefit to the employees by 1.5% of the final drawn salary for each year of service beginning on 1 February 2004. Based on actuarial valuations, past service cost incurred from 1 February 2004 to 1 January 2013, as a result of the improvement in the benefit, were RM 1,320,000 (vested) and RM1,056,000 (unvested). The average period to vesting is 4 years. The actuarial valuations also showed that Zee Bhd would incur a current service cost of RM1,287,000 for the year ended 31 December 2013. Contributions paid to the benefit plan during the year amounted to RM891,000 and benefits paid to retired employees were RM1,485,000 The annual discount rate used by the company is 10% whilst the expected rate of return is 12% per annum. The expected average remaining working lives of the employees participating in the defined benefit plan were 12 years. As at 31 December 2013, it was determined that the actuarial gains from the plan assets was RM871,200 and the remeasurement gain was RM2,831,400. Required: a. Other than post-employment benefits, MFRS 119 Employee Benefits also covers the accounting treatment of termination benefits. Explain the accounting treatment of termination benefits. (5 marks) b. Compute the actuarial gain or loss arising from the defined benefit obligation for the year ended 31 December 2013. (4 marks) c. Compute the defined benefit costs to be recognized in profit or loss for the year ended 31 December 2013. (3 marks) d. Analyze the remeasurement gain for the year ended 31 December 2013 into its components. e. If the Employees Provident Fund (EPF). a defined contribution plan. provides an annual return of 12.5%, explain one (1) reason why an employee of Zee Bhd should also participate in the company's defined benefit plan.
Expert Answer:
Answer rating: 100% (QA)
ANSWER a Termination benefits are paid to employees when their employment is terminated by the employer The benefits may be in the form of a lump sum ... View the full answer
Related Book For
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
Posted Date:
Students also viewed these accounting questions
-
A publicly accountable entity operates a defined benefit plan for its employees. Data on the plan for the year ended December 31 20x4 is as follows: Defined benefit obligation, December 31, 20x3...
-
Paul Dobson Company sponsors a defined benefit plan for its 100 employees. On January 1, 2010, the companys actuary provided the following information. Unrecognized past service...
-
Branfield Corporation sponsors a defined benefit plan for its 100 employees. On January 1, 2011, the companys actuary provided the following information: Unrecognized past service cost ........$...
-
In the diagram, the positive terminal of the 12 V battery is grounded it is at zero potential. At what potential is point X? 12 V 4 V Ground
-
Buhler Motor Company manufactures automobiles. During September 2012, the company purchased 5,000 head lamps at a cost of $10 per lamp. Buhler withdrew 4,650 lamps from the warehouse during the...
-
Under the "no pass, no play" rule for athletes, an athlete who fails a course is disqualified from participating in sports activities during the next grading period. Suppose the probability that an...
-
How many different types of information systems might an entity make use of?
-
RETAINED EARNINGS ACCOUNTS AND STATEMENT On January 1, 20--, Nguyen Companys retained earnings accounts had the following balances: Appropriated for land acquisition.......$ 75,000 Unappropriated...
-
Down Under Products, Limited, of Australia has budgeted sales of its popular boomerang for the next four months as follows: \ table [ [ , Unit ] , [ , Sales ] , [ April , 6 4 , 0 0 0 ] , [ May , 8 0...
-
Blocker Company estimates ita uncollectible accounts based on an analysis of receivables. On December 31, a junior accountant prepared the following aging schedule for the company's $88,000 in...
-
Transcribed image text: Off Materials inventory, December 1 Materials inventory, December 31 (a) 133,460 Materials purchased (a) Cost of direct materials used in production (b) Direct labor Factory...
-
Blair Waldorf Designs, known as one of the biggest competitors of Jenny Humphrey Designs, sells mostly designer dresses. Service quality (such as their expert tailoring service) is one of the areas...
-
Building and construction projects must comply with environmental requirements. Identify the legislation that relates to the environmental Acts for New South Wales.
-
Last year you bought some Alpha stock for $26.75 a share. It is currently selling for $32.50. You received a dividend of $2.25 during the year. What is your total rate of return?
-
Construct an 8 0 % confidence interval for the population standard deviation if a sample of size 1 7 has standard deviation s = 1 1 . 8 . Round the answers to at least two decimal places An 8 0 %...
-
Waldo Weir is a Concordia student who is financing his education with a student loan. Suppose he owes $30,000 when he graduates. His loan has an interest rate of 5% with equal monthly payments over...
-
Christine began working for her employer in September of 1997 and has resigned. Christine works 37.5 hours a week, does not work overtime, is paid bi-weekly and will work until the end of the current
-
The process of collaborative goal setting by a manager and subordinate, the extent to which goals are accomplished is a major factor in evaluating and rewarding the subordinate's performance. It is...
-
Belt plc and Braces plc were in the same industry. The following information appeared in their 20X9 accounts: (a) Calculate the following ratios for each company and show the numerical relationship...
-
At 31 October 20X0, Lytax Ltd was engaged in various contracts including five long-term contracts, details of which are given below: It is not expected that any customers will default on their...
-
The statements of comprehensive income for Continent plc, Island Ltd and River Ltd for the year ended 31 December 20X9 were as follows: Continent plc acquired 80% of Island Ltd for ¬27,500 on 1...
-
On September 1, 20x6, A Company purchased 100 percent of the voting stock of B Company for $480,000 in cash. The separate condensed balance sheets immediately after the purchase were as follows:...
-
Dale Company experiences heavy sales in the summer and early fall, after which time it has excess cash to invest until the next spring. On November 1, 20x6, the company invested $194,000 in U.S....
-
Scattergraph method Using the data in E4-2 and a piece of graph paper: 1. Plot the data points on the graph and draw a line by visual inspection, indicating the trend shown by the data points. 2....
Study smarter with the SolutionInn App