Question
Ivanhoe Limited sponsors a defined benefit pension plan for its employees, which it accounts for under ASPE. The following data relate to the operation of
Ivanhoe Limited sponsors a defined benefit pension plan for its employees, which it accounts for under ASPE. The following data relate to the operation of the plan for the year 2020:
1. | The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,450. | ||
2. | The companys funding policy requires a contribution to the pension trustee of $145,600 for 2020. | ||
3. | As at January 1, 2020, the company had a defined benefit obligation for accounting purposes of $997,000. The fair value of pension plan assets was $630,000 at the beginning of the year. The actual return on plan assets was $49,000, and the discount rate was 8%. | ||
4. | No benefits were paid in 2020. |
Determine the pension expense that should be recognized by the company in 2020.
Pension expense | $enter Pension expense in dollars |
eTextbook and Media
Prepare the journal entries to record pension expense and the employers payment to the pension trustee in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Year | Account Titles and Explanation | Debit | Credit |
---|---|---|---|
2020 | select an account title to record pension expense Net Defined Benefit Liability/AssetContributionsCashPension Contributions PayablePension Expense | enter a debit amount | enter a credit amount |
select an account title to record pension expense CashNet Defined Benefit Liability/AssetContributionsPension ExpensePension Contributions Payable | enter a debit amount | enter a credit amount | |
(To record pension expense.) | |||
2020 | select an account title to record contribution to the pension fund Pension ExpenseContributionsPension Contributions PayableCashNet Defined Benefit Liability/Asset | enter a debit amount | enter a credit amount |
select an account title to record contribution to the pension fund Net Defined Benefit Liability/AssetContributionsCashPension Contributions PayablePension Expense | enter a debit amount | enter a credit amount | |
(To record contribution to the pension fund.) |
eTextbook and Media
Determine the plans surplus or deficit position and the balance of the Net Defined Benefit Liability/Asset account at January 1, 2020, and at December 31, 2020.
Plan's select an option deficitsurplus | $enter a dollar amount | ||
---|---|---|---|
Balance of net defined benefit select asset or liability AssetLiability at January 1, 2020 | $enter a dollar amount | ||
Balance of net defined benefit select asset or liability AssetLiability at December 31, 2020 | $enter a dollar amount |
eTextbook and Media
Prepare the required disclosures for the 2020 financial statements.
Ivanhoe Limited (Partial) Income Statement 2020 | |||
---|---|---|---|
select an income statement item Accrued Pension CostPension ExpenseNet Defined Benefit LiabilityCashPension Contributions PayableContributionsNet Defined Benefit Asset | $enter a dollar amount |
Ivanhoe Limited (Partial) Balance Sheet 2020 | |||
---|---|---|---|
select an opening section name Fixed AssetsShareholders' EquityLong-term AssetsLong-term LiabilitiesAssetsLiabilities | |||
select a balance sheet item Pension ExpenseNet Defined Benefit LiabilityCashPension Contributions PayableContributionsNet Defined Benefit Asset | $enter a dollar amount |
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