Note: For simplicity, note the timing of funding or recognition of amounts in the pension pan. In reality, these would be averaged/recognized over the year complicating the resulting determination of the pension expense.

You are working with your colleagues in developing the pension expense to record for the year ended December 31, 2018 and are sorting through two files. One was the latest report by the Actuary on the five-year review of the defined benefit pension plan just completed. The second, provided by the Pension Fund Manager, was the past and expected performance (investment mix; returns) of the pension funds. You are able to identify the following from your analysis of these files.

Pension Fund Manager's Report

1. Balance of pension funds at December 31, 2017: $12,750,000
2. Expected/benchmark fund return for the forthcoming year provided at January 1, 2017: 2.8%; January 1, 2018: 3.0% (end of year recognition)
3. Payments to pensioners in 2018: $900,000(end of year recognition)
4. Dividends, interest and net capital appreciation of the fund for 2018: $430,000(end of year recognition)
5. Funding to the plan from the company through employee deductions and employer contributions for 2018, assumed effective at theend of 2018: $970,000.

Actuary Assessment Report

1. Long term discount rate applied: 3%; no change from the 2013 assessment
2. Current service cost accruing for service years: 2017 - $170,000; 2018: - $180,000(end of year recognition)
3. Average pensionable group life expectancy remains unchanged from the assessment conducted in 2013.
4. Implementation of extended spousal survival pension after death of the pensioned employee,effective January 1, 2018- $1,345,000
5. Higher employee turnover resulting in less pension obligation than that expected in 2013, the last actuarial assessment, for value of $735,000effective January 1, 2018.

From the accounting records, you identify that the accrued pension liability reported in the financial statements of the company at the end of December 31, 2017 is $5,175,000.

Required:

1.Prepare all pension related entries, with supporting computations, for the year ended December 31, 2018.

2.Provide the balance, properly classified, described and briefly note referenced, with respect to the pension plan as at December 31, 2018.

Intermediate Accounting Chapter 19 Online Assignment Com - an Accounts Pension Plan Description Experience Pension Balance Pension Pension Plan Gain/ Loss expense accrued Obligation Assets derivation pension liability Entries: Balance Sheet (Statement of Financial Position) & summary