Hello good morning:

Could you please help me to see if my answer is correct? I really need to get the full score possible in this question (i need the most points as possible because I lost some points in my last project) :(

Thanks.

Gretta's Emporium Corp. provides its employees with a defined benefit pension plan. The plan assets and liabilities are shown below:

December 31, 20X6

December 31, 20X5

Assets ? market value

$1,371,000

$1,595,000

Liabilities ? actuarial value

$1,288,000

$1,487,000

? The discount rate used in the actuarial assumptions is 3%.

? The plan actuary advised that the current service cost for the year was $187,200. This service cost is accrued at year end.

? In 20X6, the pension plan made payments totalling $50,000 to retirees. The payments were made evenly throughout the year.

? A plan improvement was made at the beginning of 20X6. The improvements were backdated for all members of the plan. The actuary estimated the cost at $18,000. Gretta's Emporium Corp. did not make a payment to fund the plan improvements.

? On July 1, 20X6, Gretta's Emporium Corp. made a contribution of $34,000 to the defined benefit plan.

? On December 31, 20X6, Gretta's Emporium Corp. sold one of its subsidiaries, and as a result, a group of employees was removed from the defined benefit plan. The actuary estimated that this change reduced the total defined benefit obligation by $400,000. As compensation, at the date of transfer, the pension plan trustee transferred $250,000 of the existing plan assets to the employees' new plan.

Required:

a) reconciliation from the opening balances to the ending balances of the defined benefit obligation and plan assets for the year ended December 31, 20X6.

b) summary journal entries for pension expense for the year.

THIS IS MY ANSWER:

b) Prepare summary journal entries for pension expense for the year. DR Pension expense - current service cost 187,200 DR Pension expense - past service cost 18,000 DR Pension expense - interest expense on I 45,150 CR Pension expense - expected return on plan assets 47,850 CR Net defined benefit asset/liability 202,500 To record pension expense.Question 1 a) Prepare a reconciliation from the opening balances to the ending balances of the defined benefit obligation and plan assets for the year ended December 31, 20X6. discount rate 3% Opening balance PVDBO - Jan. 1 1,487,000 (+) Current service cost 187,200 (+/-) Past service cost 18,000 (+) Interest expense on PVDBO* 45,150 Pension benefits paid 50,000 Expected PVDBO 1,687,350 (+/-) Actuarial (gains) and losses 399,350 (=) Closing balance PVDBO - Dec. 31 1,288,000 Opening balance of plan assets - Jan. 1 1,595,000 (+) Expected return on plan assets** 47,850 (+ ) Funding received from the company 284,000 (-) Pension benefits paid 50,000 (9) Expected value of plan assets 1,876,850 (+/-) Remeasurement gains and (losses) on plan as: - 505,850 Closing balance of plan assets - Dec. 31 1,371,000 * Interest expense on PVDBO= 1,487,000+18,000= 1,505,000 X 3 %= 45,150. * Expected return on plan assets= 1,595,000 x 3%= 47,850