Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Jennings Inc. reports the following January 1, 2019 balances for its defined benefit pension plan: Plan assets: $360,000 Defined benefit obligation: $360,000. Other data relating

Jennings Inc. reports the following January 1, 2019 balances for its defined benefit pension plan:

Plan assets: $360,000

Defined benefit obligation: $360,000.

Other data relating to three years of operation of the plan are as follows:

2019

2020

2021

Annual service cost

$32,000

$33,000

$45,000

Discount rate

10%

10%

10%

Actual return on plan assets

39,100

40,370

45,200

Funding

36,800

103,700

59,300

Benefits paid

32,200

37,720

48,300

Past service cost (plan amended, 1/1/2020)

68,000

Change in actuarial assumptions establishes a December 31, 2020 defined benefit obligation of

696,000*

* Note, you need to work backward to determine the actuarial gains or losses.

Required:

Required:

  1. Prepare and complete a pension work sheet for 2021, 2020, and 2021, assuming that Jennings reports under IFRS.
  2. Prepare a continuity schedule of the defined benefit obligation for 2021.
  3. Prepare a continuity schedule of the plan assets for 2021.
  4. Determine the pension expense for 2021.
  5. Prepare the journal entries to reflect the pension plan transactions and events for 2021.
  6. Prepare a schedule reconciling the pension plan's surplus or deficit with the pension amounts reported on the statement of financial position over the three-year period.
  7. Had Jennings reported under ASPE, how would its pension accounting have been different? Show your computation and explain. (Hint: how would the pension expense for 2021 have been different?)
  8. How has the risk of Jennings employees pension benefits changed from 2019 to 2021? Explain.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Theory Of Interest

Authors: Friedrich A. Lutz

2nd Edition

1138539074,1351472836

More Books

Students also viewed these Finance questions

Question

Explain the benefits of using convertible mobile shelving.

Answered: 1 week ago