Commercial Drive Limited (CDL) has an employer funded defined benefit pension plan and has adopted the...
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Commercial Drive Limited (CDL) has an employer funded defined benefit pension plan and has adopted the provisions of IFRS 19 permitting immediate recognition of pension plan performance. The following data is gathered for the year ended December 31, 2013. In this and all models studied at this introductory level, assume the current service cost, benefits paid and plan funding occur at the end of the period. In reality, all of these would be averaged during the period and the resulting expected asset return and interest cost would be calculated accordingly. Rate provided by the Actuary in deriving the Benefit Obligation and provided by Fund Manager in providing the expected return on Plan Assets...........5.0% Defined Benefit Obligation: Balance at January 1, 2013.. Current service cost.... Plan enhancement, effective, Jan.1, 2013...... Balance per actuary..... December 31, 2013... $12,177,500 ****** $11,275,000 400,000 100,000 Plan Assets: Balance at January 1, 2013. Funding to the plan.... Benefits paid....... **********. Balance per actuary... December 31, 2013 $9,883,250 $9,062,500 575,000 (assume at year end) 306,250 Required 1- Prepare the pension expense and funding entries for 2013. Show all supporting calculations. Assume EBL reports pension expense relating to normal net income as one line item. Round amounts to the nearest dollar; no cents. Items Balance, Jan 1 Current Service cost Interest on DBO Past Service cost Expected earnings PA Benefits paid Acturial gain/ loss on DBO Acturial gain/ loss on Plan assets Annual Pension Expense Experience Gains/Loss OCI Cash Accrued pension liability/ asset Defined Benefit Obligation Plan Assets Ending total (1 mark each line- 10 marks total) NOTE: Please note debits as positive amounts and credits as negative in (brackets) Show calculations here: Required 2: What would be reported on the Statement of Financial Position at December 31, 2013 in respect of the pension? How would it be classified? (2 marks) Commercial Drive Limited (CDL) has an employer funded defined benefit pension plan and has adopted the provisions of IFRS 19 permitting immediate recognition of pension plan performance. The following data is gathered for the year ended December 31, 2013. In this and all models studied at this introductory level, assume the current service cost, benefits paid and plan funding occur at the end of the period. In reality, all of these would be averaged during the period and the resulting expected asset return and interest cost would be calculated accordingly. Rate provided by the Actuary in deriving the Benefit Obligation and provided by Fund Manager in providing the expected return on Plan Assets...........5.0% Defined Benefit Obligation: Balance at January 1, 2013.. Current service cost.... Plan enhancement, effective, Jan.1, 2013...... Balance per actuary..... December 31, 2013... $12,177,500 ****** $11,275,000 400,000 100,000 Plan Assets: Balance at January 1, 2013. Funding to the plan.... Benefits paid....... **********. Balance per actuary... December 31, 2013 $9,883,250 $9,062,500 575,000 (assume at year end) 306,250 Required 1- Prepare the pension expense and funding entries for 2013. Show all supporting calculations. Assume EBL reports pension expense relating to normal net income as one line item. Round amounts to the nearest dollar; no cents. Items Balance, Jan 1 Current Service cost Interest on DBO Past Service cost Expected earnings PA Benefits paid Acturial gain/ loss on DBO Acturial gain/ loss on Plan assets Annual Pension Expense Experience Gains/Loss OCI Cash Accrued pension liability/ asset Defined Benefit Obligation Plan Assets Ending total (1 mark each line- 10 marks total) NOTE: Please note debits as positive amounts and credits as negative in (brackets) Show calculations here: Required 2: What would be reported on the Statement of Financial Position at December 31, 2013 in respect of the pension? How would it be classified? (2 marks)
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Answer rating: 100% (QA)
SOLUTION Based on the data provided here are some calculations for the year ended December 31 2013 Pension Expense Current service cost 100000 Interest cost on benefit obligation 11275000 100000 x 50 ... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
Posted Date:
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