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.

Use this given information plus any additional given information to answer Questions. Treat each question as being independent of the others unless stated otherwise. You are advised not to use any information given in other questions unless stated otherwise.

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

a.

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

b.

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

c.

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

2)

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-Plan 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.