Hi-Flie-Ing Corporation offers a defined benefit pension plan to all its eligible employees. The company uses the December 31 year end and uses IFRS to prepare its financial statements. It has reported a credit balance of $1,380,000 as at December 31, 2018 for its Net Defined Benefit Liability/Asset Account. The plan is underfunded by 20% of its Defined Benefit Obligation. The company also recorded, during 2019, $200,000 as Past Service Costs which were assumed to have accrued on January 1, 2019

1) The company determines its interest expenses and benefits on the balance existing at the beginning of the year. You are told that the company recorded $386,400 as the expected returns on Plan Assets for the year. $546,000 were recorded as current services costs during 2019. What would be the interest expense on the Defined Benefit Obligation for 2019?

A. $497,000.

b. $96,000.

c. $483,000.

d. $200,000.

e. Cannot be determined with the given information.

2) Given the actual rate of return on Plan Assets to be 6.25% and the expected returns on Plan Assets amounting to $386,400, what would be the OCI impact from gain or loss on Plan Assets?

a. $53,250 CR.

b. $53,250 DR.

c. $41,400 CR.

d. $41,400 DR.

e. Cannot be determined with the given information.

3) Each year, the company makes a contribution to the plan at the end of the year. For 2019, this contribution amounted to 30% of the deficit in funding reported at the end of 2018. The entry reflected in the employers books of accounts should show

a. DEBIT-Accrued Pension Asset/Liability [$414,000]; CREDIT-Cash [$414,000].

b. DEBIT-Accrued Pension Asset/Liability [$474,000]; CREDIT-Cash [$474,000].

c. DEBIT-Pension Expenses [$414,000]; CREDIT-Cash [$414,000].

d. DEBIT-Pension Expenses [$474,000]; CREDIT-Cash [$474,000].

e. DEBIT-Contribution Surplus [$414,000]; CREDIT-Cash [$414,000].

4) A pension plan paid out benefits amounting to $343,200 during the year to retired plan members. The entry reflected in a pension fund work sheet should show

a. DEBIT-Plan Assets ; CREDIT-Cash.

b. DEBIT-Plan Expenses; CREDIT-Cash.

c. DEBIT-Plan Expenses; CREDIT-Plan Assets.

d. DEBIT-Defined Benefit Obligation; CREDIT-Cash.

e. None of the above.

5) The balance in the Defined Benefit Obligation on December 31, 2019 of a pension plan was revised to $7,920,000 upon an actuarial review. Prior to that, the computed amount was determined to be $7,800,000 also on December 31, 2019. How should the company record this change on the pension worksheet?

a. DEBIT-Other Comprehensive Income, [$120,000] ; CREDIT-Defined Benefits Obligation, [$120,000].

b. DEBIT-Pension Fund Expenses, [$120,000]; CREDIT-Defined Benefits Obligation, [$120,000].

c. DEBIT-Defined Benefits Obligation, [$120,000]; CREDIT-Pension Fund Expenses, [$120,000].

d. The company contributes a cash amount of $120,000 to the Pension Fund.

e. The company receives a cash amount of $120,000 from the Pension Fund as a reimbursement for the loss suffered.

The The Pension Expense in a pension plan for the year were recorded at $856,800. In addition, an amount of $161,400 had been debited to the Other Comprehensive Income account to record all actuarial losses for the year. In addition, the company had contributed a cash amount of $350,000 to the Plan Assets. What would have been the amount recorded as Pension expenses for 2019 if the company were reporting under ASPE?

a. $$856,800.

b. $$757,200.

c. $161,400.

d. $350,000.

e. None of the above

On December 31, 2019, Tyree Corporation received the DBO report from the actuary. The following information was included in the report: ending DBO, $1,100,000; benefits paid to retirees, $100,000; interest cost, $80,000. The discount rate applied by the actuary was 8%. There was no actuarial revaluation required nor any past service cost. What was the service cost for the year?

a. $$20,000.

b. $920,000

c. $180,000.

d. $120,000.

e. None of the above.