Question
Canada Gray Ltd. (Gray), is a successful garment manufacturer and has shares listed in the Toronto Stock Exchange. The company was founded by the Gray
Canada Gray Ltd. (Gray), is a successful garment manufacturer and has shares listed in the Toronto Stock Exchange. The company was founded by the Gray family who is passionate about using quality organic fabrics. Gray has a calendar year end. On January 1, 2021, Gray reported the following balances relating to their defined benefit pension plan: Defined benefit obligation (DBO). Fair value of plan assets. $1,600,000 1,600,000 Other data related to the pension plan for calendar 2021 are: Current service cost... Contributions to the plan.. Benefits paid . Actual return on plan assets Discount rate on the DBO/plan assets 70,000 102,000 100,000 96,000 9% Required: a. Calculate the defined benefit obligation at December 31, 2021 (6 marks)
b. Calculate the fair value of plan assets at December 31, 2021 (8 marks)
c. Calculate pension expense for 2021 (5 marks)
d. Prepare all the journal entries relating to the pension transactions for 2021 (5 marks)
e. Calculate the funded position at December 31, 2021 (3 marks)
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