Return to the facts of A19-12. Assume instead that this pension plan is sponsored by a private company and ASPE applies.

Data From A19-12

The following data relate to a defined benefit pension plan:

Required:
1. Prepare an entry to record pension expense and an entry to record the contribution to the pension fund for 20X2. Note: The solution to this assignment is based on one calculation of pension expense, followed by one entry for pension expense, rather than a series of entries for separate components.
2. Based on the entries in requirement 1, calculate the SFP net defined benefit liability as of 31 December 20X2, and prove this number based on the closing balances of the defined benefit liability and pension plan assets.

Transcribed Image Text:

Defined benefit obligation, 31 December 20X1 Benefits paid to retirees in 20X2 during the year Current service cost for 20X2 Actual return on plan assets for 20X2 Fair value of plan assets, 31 December 20X1 Funding payment 31, December 20X2 Past service cost from amendment dated 1 January 20X2; liability is increased because benefits were increased on a retrospective basis. Actuarial revaluation dated 31 December 20X2; decrease to liability because of changed mortality assumptions. Long-term interest rate on corporate bonds $106,000 14,000 6,700 3,200 78,000 7,000 3,700 (2,500) 7%