Return to the facts of A19-11. Assume instead that this pension plan is sponsored by a private company and ASPE applies.

Data From A19-11

Micro Computers Inc. sponsors a defined benefit pension plan for its employees. It is now the 20X2 fiscal year. Long-term corporate borrowing rates for companies with this risk profile are 5%. Information with respect to the pension plan is as follows:

Required:
1. Prepare an entry to record pension expense and an entry to record the contribution to the pension fund for 20X2. Note: The solution to this assignment is based on one calculation of pension expense, followed by one entry for pension expense, rather than a series of entries for separate components.
2. Based on the entries in requirement 1, calculate the SFP net defined benefit liability as of 31 December 20X2, and prove this number based on the closing balances of the defined benefit liability and pension plan assets.

Transcribed Image Text:

Current service cost for 20X2 Fair value of plan assets, 31 December 20X1 Benefits paid to retirees during 20X2 $ 175,200 1,936,000 214,900