The following information is available for Huntley Corporation’s pension plan for the year 2011:
Expected return on plan assets ............ $ 15,000
Actual return on plan assets ............ 17,000
Benefits paid to retirees ............... 40,000
Contributions (funding) ............... 95,000
Discount rate .................. 10%
Accrued benefit obligation, Jan. 1, 2011 ......... 500,000
Service cost .................... 65,000
Huntley uses the deferral and amortization approach under IFRS to account for its defined benefit plan.
Instructions
(a) Calculate pension expense for the year 2011, and provide the entries to recognize the pension expense and funding for the year, assuming that Huntley accounts for its pension under the deferral and amortization approach.
(b) Calculate pension expense for the year 2011, and provide the entries to recognize the pension expense and funding for the year, assuming that Huntley accounts for its pension with the immediate recognition approach. Assume that the ABO provided at January 1, 2011, for accounting and funding purposes is the same.