XYZ Inc., a publicly accountable entity has initiated a defined benefit pension plan for all employees effective
Question:
XYZ Inc., a publicly accountable entity has initiated a defined benefit pension plan for all employees effective January 1, 2019 at an initial cost of $700,000. At the commencement of the plan, the company provided $300,000 of funding. Future pension benefits earned in the current period amounted to $450,000. In 2019, the average yield on high-quality corporate debt equaled 4.2%. Payments to retirees in the current year paid at the end of the year equaled $120,000. At the end of the current year, the actuary reported an estimate of $1,100,000 and the trustee reported the fair value of the plan assets to be $350,000.
i. Prepare a continuity schedule of the Defined Benefit Obligation and the Plan Assets for 2019.
ii. Calculate the funded status on December 31, 2019.
Intermediate Accounting Volume 2
ISBN: 9781119497042
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy