he accounting for defined-benefit pension plans is the same under GAAP and IFRS. 2. Prior service cost is recognized on the balance sheet under both GAAP and IFRS. 3. Prior service cost is amortized into income over the expected service lives of employees under both GAAP and IFRS. 4. Under IFRS companies may recognize actuarial gains and losses in income immediately. 5. Under GAAP companies may either recognize actuarial gains and losses in income immediately or amortize them over the expected service lives of employees. Multiple Choice 6. The International Accounting Standards Board has proposed changes to IFRS pension accounting including all of the following except a. elimination of smoothing via the corridor approach. b. different presentation of pension costs in the income statement. c. requiring recognition of actuarial gains and losses over the expected service lives of employees. d. a new category of pensions for accounting purpose contribution-based promises. 7. Midland Company follows GAAP for its external financial reporting whereas Bailey Company follows IFRS for its external financial reporting. The amount contributed by Midland for its defined contribution plan for 2021 amounted to $55,000 and the amount contributed by Bailey for its defined contribution plan for 2021 amounted to $76,000. The remaining service lives of employees at both firms is estimated to be 10 years. What is the amount of expense related to pension costs recognized by each company in its income statement for the year ended December 31, 2021? Midland Bailey a. $ 5,500 $76,000 b. $55,000 $76,000 c. $55,000 $ 7,600 d. $ 5,500 $ 7,600

8. Midland Company follows GAAP for its external financial reporting whereas Bailey Company follows IFRS for its external financial reporting. The remaining service lives of employees at both firms is estimated to be 10 years. The following information is available for each company at December 31, 2021 related to their respective defined-benefit pension plans. Midland Bailey Net of pension assets and liabilities $110,000 $140,000 Prior service cost $230,000 $175,000 What is the amount of prior service cost recognized by each company in its income statement for the year ended December 31, 2021? Midland Bailey a. $230,000 $175,000 b. $ 23,000 $175,000 c. $ 23,000 $ 17,500 d. $230,000 $ 17,500 9. Midland Company follows GAAP for its external financial reporting whereas Bailey Company follows IFRS for its external financial reporting. The remaining service lives of employees at both firms is estimated to be 10 years. The following information is available for each company at December 31, 2021 related to their respective defined-benefit pension plans. Midland Bailey Net of pension assets and liabilities $110,000 $140,000 Prior service cost $220,000 $175,000 What is the amount of Pension Asset/Liability recognized by each company in its balance sheet at December 31, 2021? Midland Bailey a. $110,000 $140,000 b. $ 11,000 $140,000 c. $110,000 $ 14,000 d. $ 11,000 $ 14,000 10. Midland Company follows GAAP for its external financial reporting whereas Bailey Company follows IFRS for its external financial reporting. The remaining service lives of employees at both firms is estimated to be 10 years. The following information is available for each company at December 31, 2021 related to their respective defined-benefit pension plans. Midland Bailey Net of pension assets and liabilities $110,000 $140,000 Prior service cost (after amortization, if any)$230,000 $175,000 What is the amount of Prior Service Cost recognized by each company on its balance sheet at December 31, 2021? Midland Bailey a. $230,000 $175,000 b. $-0- $175,000 c. $-0- $-0-