Solace Ltd. (SL) is a grocery food distributor operating nationally throughout Canada. The CFO for the company died suddenly during the year and the payroll accountant was put in charge of recording all of the transactions related to the pension plan. The company has a December fiscal year-end. You have been recently hired as a new accounting analyst for the company, working for the new CFO. Both of you started work yesterday, on 7 January 20X8. The CFO has reviewed the Solace Ltd. (SL) is a grocery food distributor operating nationally throughout Canada. The CFO for the company died suddenly during the year and the payroll accountant was put in charge of recording all of the transactions related to the pension plan. The company has a December fiscal year-end. You have been recently hired as a new accounting analyst for the company, working for the new CFO. Both of you started work yesterday, on 7 January 20X8. The CFO has reviewed the draft year-end statements to determine if any year-end journal entries are required before the statements are forwarded to the auditors. In particular, he is concerned about some odd accounts and amounts related to the company’s pension plan that appear on the statements. Exhibit 1 provides the extracts from the draft statements related to these accounts. Exhibit 2 provides the details of the pension plan and related transactions for the year.

The CFO has asked you to review the statements and related information to determine if the pension has been correctly measured and recorded. She has asked you to write a report, outlining what has been done incorrectly, if anything, along with any recommendations on journal entries to correct the accounting for the pension transactions during the year.

Required:
Prepare the report. 

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EXHIBIT 1 SOLACE LIMITED Selected Pension Information Statement of Comprehensive Income Pension expense Post-retirement benefits expense Statement of Financial Position Net defined benefit asset Other post-employment benefit liability Accumulated OCI, pension 20X8 $203,500 $ 53,600 $433,500 dr. 650,800 cr. 27,900 cr.