Highland Corporation reports the following January 1, 2019 balances for its defined benefit pension plan: Plan assets:
Question:
Highland Corporation reports the following January 1, 2019 balances for its defined benefit pension plan:
Plan assets: $520,000
Defined benefit obligation: $520,000.
Other data relating to the three years of operation of the plan are as follows:
2019 | 2020 | |
Annual service cost | $46,800 | $ 53,700 |
Discount rate | 8% | 8% |
Actual return on plan assets | 41,600 | 50,370 |
Funding of current service cost | 36,800 | 112,500 |
Benefits paid | 42,200 | 47,720 |
Past service cost (plan amended, January 1, 2020) | 168,000 | |
Change in actuarial assumptions establishes a December 31, 2020 defined benefit obligation of | 906,000 |
Required:
- Prepare pension worksheets for 2019, and 2020, assuming that Highland reports under IFRS.
- Prepare a continuity schedule of the projected benefit obligation over the three-year period.
- Prepare a continuity schedule of the plan assets over the three-year period.
- Determine the pension expense for 2019 and 2020.
- Prepare the journal entries to reflect the pension plan transactions and events for each year.
- Prepare a schedule reconciling the pension plan's surplus or deficit with the pension amounts reported on the statement of financial position over the two-year period.
Had Highland reported under ASPE, how would its pension expense for each of 2019 and 2020 have been different?
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield