Pension worksheet Prospero Company has a defined benefit retirement plan for its employees. At the end of 2017, the following information was available. Statement of financial position- Pension Asset Defined Benefit Obligation 6,400 689,600 Pension Plan Assets 696,000 For the year ending December 31, 2018, the following information has been provided by the actuaries: Expected return on Current Service costs plan assets and discount rate 10% $89,650 Actual return on assets 72,400 Annual contributions to the pension plan Benefits paid to employees. Past service costs 120,000 71,830 172,400 The past service costs relate to changes made to the pension plan benefits effective December 31, 2018 At December 31, 2018, the balance in the defined benefit obligation willl be $955,400. This may, or may not, require recognition of a re-measurement gain or loss. Required: 1. Assume that Prospero Company follows IFRS. Prepare a pension worksheet for 2018. Prepare summary entries required to record the transactions related to the pension a. b. plan for 2018. Determine the funded status of the pension plan, and identify the balance that will be C. shown on the statement of financial position. 2. Assume that Prospero Company follows ASPE a. Prepare a pension worksheet for 2018. b. Prepare summary entries required to record the transactions related to the pension plan for 2018. c. Determine the funded status of the pension plan, and identify the balance that will be shown on the statement of financial position. d Identify any particular values that should be disclosed in the notes to the financial statements regarding pension expense. Defined Benefit Pension Plans 1245 records as if there were just one set for recording the entries. For each transaction or event, the debits must equal the credits and the balance in the Accrued Pension Asset/Liability column must equal the net balance in the Memo Record columns. If the ABO is greater than the plan assets, a pension liability is reported on the balance sheet. If he ABO is less than the plan assets, a pension asset results. Let's walk through the immediate recognition model by using the facts and circum- Sances set out in Illustration 19-8 that apply to Zarle's pension plan for the three-year period from 2010 to 2012 hustration 19-8 2010 2011 2012 Far value of plan assets, first of vear Accrued benefit obligation (ABO) for tunding purposes, first of year Darrent service cost for year isterest or discount rate on the liability Cost of past service benefits granted Zarle Corporation Pension- Plan, 2010-2012 $100,000 $111,000 $134,100 100,000 9,000 10 % 112,000 9,500 10% 212.700 13,000 10 % January 1, 2011 Fxpected earnings on plan assets for year Actual earnings on plan assets for year Emoloyer contributions for year (funding) Renefits paid to retirees by trustee for vear Actuarial loss due to change in actuarial assumptions Plan assets, end of year Accrued benefit obligation (ABO), end of year Funded status, end of year-over- or Junder)-funded -0- 10 % 10.000 8,000 7,000 80,000 10 % 11,100 20,000 8,000 -0- 10% 12.000 24,000 10,500 -0- 28,530 159.600 -0- 111,000 134,100 112.000 265,000 212,700 (1,000) (78,600) (105,400) The Basics-2010 Work Sheet and Entries. Assume that Zarle Corporation begins is 2010 fiscal year with an ABO for funding purposes of $100,000, plan assets of $100,000, and a S0 balance in its Accrued Pension Asset/Liability account on the balance sheet. Using the information found in Illustration 19-8, Illustration 19-9 presents the work sheet, including the beginning balances and all the pension transactions that Zarle Corporation needs to account for in 2010. The beginning balances of the accrued benefit obligation and the pension plan assets are recorded on the work sheet's first line in the memo record. They are not recorded in the accounts and, therefore, are not reported as a lustration 19-9 G D Memo Record Pension Work Sheet-2010 General Journal Entries Accued Pension Asset/ Accrued Benefit Annual Plan Assets Pension Expense Obligation Liability Cash Items 100,000 Cr. 100,000 Dr. -0- 3 Balance, Jan. 1, 2010 a) Service cost 5 e Interest cost 9,000 Cr. 9,000 Dr. 10,000 Cr. 10,000 Dr. 10,000 Dr. 6 c) Actual return 7 0 Contribution 10.000 Cr. 8,000 Dr. 8.000 Cr. 7,000 Cr. 7,000 Dr. Benefits paid Expense entry, 2010 0Contribution entry, 2010 Balance, Dec. 31, 2010 9,000 Cr 8,000 Dr. 1,000 Cr 9,000 Dr. 00 Cr 112,000 Cr. 111,000 Dr. Pension worksheet Prospero Company has a defined benefit retirement plan for its employees. At the end of 2017, the following information was available. Statement of financial position- Pension Asset Defined Benefit Obligation 6,400 689,600 Pension Plan Assets 696,000 For the year ending December 31, 2018, the following information has been provided by the actuaries: Expected return on Current Service costs plan assets and discount rate 10% $89,650 Actual return on assets 72,400 Annual contributions to the pension plan Benefits paid to employees. Past service costs 120,000 71,830 172,400 The past service costs relate to changes made to the pension plan benefits effective December 31, 2018 At December 31, 2018, the balance in the defined benefit obligation willl be $955,400. This may, or may not, require recognition of a re-measurement gain or loss. Required: 1. Assume that Prospero Company follows IFRS. Prepare a pension worksheet for 2018. Prepare summary entries required to record the transactions related to the pension a. b. plan for 2018. Determine the funded status of the pension plan, and identify the balance that will be C. shown on the statement of financial position. 2. Assume that Prospero Company follows ASPE a. Prepare a pension worksheet for 2018. b. Prepare summary entries required to record the transactions related to the pension plan for 2018. c. Determine the funded status of the pension plan, and identify the balance that will be shown on the statement of financial position. d Identify any particular values that should be disclosed in the notes to the financial statements regarding pension expense. Defined Benefit Pension Plans 1245 records as if there were just one set for recording the entries. For each transaction or event, the debits must equal the credits and the balance in the Accrued Pension Asset/Liability column must equal the net balance in the Memo Record columns. If the ABO is greater than the plan assets, a pension liability is reported on the balance sheet. If he ABO is less than the plan assets, a pension asset results. Let's walk through the immediate recognition model by using the facts and circum- Sances set out in Illustration 19-8 that apply to Zarle's pension plan for the three-year period from 2010 to 2012 hustration 19-8 2010 2011 2012 Far value of plan assets, first of vear Accrued benefit obligation (ABO) for tunding purposes, first of year Darrent service cost for year isterest or discount rate on the liability Cost of past service benefits granted Zarle Corporation Pension- Plan, 2010-2012 $100,000 $111,000 $134,100 100,000 9,000 10 % 112,000 9,500 10% 212.700 13,000 10 % January 1, 2011 Fxpected earnings on plan assets for year Actual earnings on plan assets for year Emoloyer contributions for year (funding) Renefits paid to retirees by trustee for vear Actuarial loss due to change in actuarial assumptions Plan assets, end of year Accrued benefit obligation (ABO), end of year Funded status, end of year-over- or Junder)-funded -0- 10 % 10.000 8,000 7,000 80,000 10 % 11,100 20,000 8,000 -0- 10% 12.000 24,000 10,500 -0- 28,530 159.600 -0- 111,000 134,100 112.000 265,000 212,700 (1,000) (78,600) (105,400) The Basics-2010 Work Sheet and Entries. Assume that Zarle Corporation begins is 2010 fiscal year with an ABO for funding purposes of $100,000, plan assets of $100,000, and a S0 balance in its Accrued Pension Asset/Liability account on the balance sheet. Using the information found in Illustration 19-8, Illustration 19-9 presents the work sheet, including the beginning balances and all the pension transactions that Zarle Corporation needs to account for in 2010. The beginning balances of the accrued benefit obligation and the pension plan assets are recorded on the work sheet's first line in the memo record. They are not recorded in the accounts and, therefore, are not reported as a lustration 19-9 G D Memo Record Pension Work Sheet-2010 General Journal Entries Accued Pension Asset/ Accrued Benefit Annual Plan Assets Pension Expense Obligation Liability Cash Items 100,000 Cr. 100,000 Dr. -0- 3 Balance, Jan. 1, 2010 a) Service cost 5 e Interest cost 9,000 Cr. 9,000 Dr. 10,000 Cr. 10,000 Dr. 10,000 Dr. 6 c) Actual return 7 0 Contribution 10.000 Cr. 8,000 Dr. 8.000 Cr. 7,000 Cr. 7,000 Dr. Benefits paid Expense entry, 2010 0Contribution entry, 2010 Balance, Dec. 31, 2010 9,000 Cr 8,000 Dr. 1,000 Cr 9,000 Dr. 00 Cr 112,000 Cr. 111,000 Dr