Masterson Inc. has set up a defined benefit plan for its employees. The following data pertains to
Question:
Masterson Inc. has set up a defined benefit plan for its employees.
The following data pertains to the plan:
Year 2: |
|
Defined benefit obligation, January 1st: | $30,000 |
Fair Value of Plan Assets, January 1st: | $20,000 |
Plan amendment during year 1 resulting in additional benefits payable to employee group | $10,000 |
Actuarial revaluation of DBO (increase) | $3,000 |
Funding of plan assets during Year | $4,500 |
Current service cost | $3,500 |
Benefits paid to retirees | $1,200 |
Fair Value of Plan Assets, Dec. 31st, Year 2. | $24,800 |
Actual return on Plan Assets | $1,500 |
Year 3: |
|
Actuarial revaluation of DBO (increase) | $600 |
Funding of plan assets | $3,000 |
Current service cost | $4,000 |
Benefits paid to retirees | $4,000 |
Fair Value of Plan Assets, Dec. 31st, Year 3. | $23,950 |
Actual return on Plan Assets | $150 |
Additional information:
- The company has a December 31st, year-end.
- The plan is non-contributory.
- The company's long-term debt is subject to a 6% discount rate.
Provide the answer to the following:
a) Masterson's pension expense as per IFRS for Year 2 would be?
b) What would be the balance in the Defined Pension Liability/Asset account at the end of year 2? Indicate Dr or Cr as well as amount.
c) Is Masterson's defined benefit plan, at Dec 31, Year 2 underfunded or overfunded and by how much?
d) Masterson's Statement of Financial Position under IFRS for Year 2 would show a year end balance in Accumulated Other Comprehensive Income (AOCI) of how much, assuming the opening balance was 0. Please indicate amount and Dr. or Cr. balance.
e) Masterson's pension expense as per IFRS for Year 3 would be reported as?