Question
Pearl Corporation is a publicly traded company that follows IFRS. On December 31, 2019, Pearl financial records indicated the following information related to the companys
Pearl Corporation is a publicly traded company that follows IFRS. On December 31, 2019, Pearl financial records indicated the following information related to the companys defined benefit pension plan:
Defined Benefit Obligation | $3,714,000 | |
Pension Plan Assets | 3,714,000 |
On July 1, 2020, Pearl acquired the operations of Trap Ltd. As one of the conditions of the purchase, Pearl agreed that Traps employees would be included in Pearls defined benefit pension plan, and would be granted credit for the past service of Traps employees. The actuary estimated the value of the prior service amount granted on July 1, 2020 to be $193,000. Pearl actuary provided the following information on December 31, 2020:
Current year service cost | $921,000 | |
Employer contributions for the year | 899,000 | |
Benefits paid to retirees | 318,000 | |
Actuarial increase in pension obligations | 48,000 | |
Discount rate | 6% | |
Actual return on assets | 4% |
Prepare a pension worksheet for Pearl Corporation for the year ending December 31, 2020. Prepare the journal entry to record the pension expense for 2020.
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