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i Explain the major differences between a defined contribution scheme and a defined benefit scheme. ii Prepare journal entries for the employee benefit plan for

i Explain the major differences between a defined contribution scheme and a defined benefit scheme.

ii Prepare journal entries for the employee benefit plan for Good Ltd for the year ended 31 December 2012.

iii Calculate the actuarial gains and losses on plan obligation and return on plan assets.

iv Show the statement of comprehensive income extract for the year ended 31 December 2012.

v Show the statement of financial position extract as at 31 December 2012.


a It is common for a company to grant share options to its directors and employees. Explain whether granting such share options affects the cash flows of the issuing company.

b Prosperity Ltd (‘Prosperity’) is a listed Hong Kong-based manufacturer of fashion garments. It had 7 million ordinary shares in issue of $50 each. It operates a share option scheme for the benefit of key employees as part of their remuneration package.



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