Commercial Drive Limited (CDL) has an employer funded defined benefit pension plan and has adopted the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Commercial Drive Limited (CDL) has an employer funded defined benefit pension plan and has adopted the provisions of IFRS 19 permitting immediate recognition of pension plan performance. The following data is gathered for the year ended December 31, 2013. In this and all models studied at this introductory level, assume the current service cost, benefits paid and plan funding occur at the end of the period. In reality, all of these would be averaged during the period and the resulting expected asset return and interest cost would be calculated accordingly. Rate provided by the Actuary in deriving the Benefit Obligation and provided by Fund Manager in providing the expected return on Plan Assets...........5.0% Defined Benefit Obligation: Balance at January 1, 2013.. Current service cost.... Plan enhancement, effective, Jan.1, 2013...... Balance per actuary..... December 31, 2013... $12,177,500 ****** $11,275,000 400,000 100,000 Plan Assets: Balance at January 1, 2013. Funding to the plan.... Benefits paid....... **********. Balance per actuary... December 31, 2013 $9,883,250 $9,062,500 575,000 (assume at year end) 306,250 Required 1- Prepare the pension expense and funding entries for 2013. Show all supporting calculations. Assume EBL reports pension expense relating to normal net income as one line item. Round amounts to the nearest dollar; no cents. Items Balance, Jan 1 Current Service cost Interest on DBO Past Service cost Expected earnings PA Benefits paid Acturial gain/ loss on DBO Acturial gain/ loss on Plan assets Annual Pension Expense Experience Gains/Loss OCI Cash Accrued pension liability/ asset Defined Benefit Obligation Plan Assets Ending total (1 mark each line- 10 marks total) NOTE: Please note debits as positive amounts and credits as negative in (brackets) Show calculations here: Required 2: What would be reported on the Statement of Financial Position at December 31, 2013 in respect of the pension? How would it be classified? (2 marks) Commercial Drive Limited (CDL) has an employer funded defined benefit pension plan and has adopted the provisions of IFRS 19 permitting immediate recognition of pension plan performance. The following data is gathered for the year ended December 31, 2013. In this and all models studied at this introductory level, assume the current service cost, benefits paid and plan funding occur at the end of the period. In reality, all of these would be averaged during the period and the resulting expected asset return and interest cost would be calculated accordingly. Rate provided by the Actuary in deriving the Benefit Obligation and provided by Fund Manager in providing the expected return on Plan Assets...........5.0% Defined Benefit Obligation: Balance at January 1, 2013.. Current service cost.... Plan enhancement, effective, Jan.1, 2013...... Balance per actuary..... December 31, 2013... $12,177,500 ****** $11,275,000 400,000 100,000 Plan Assets: Balance at January 1, 2013. Funding to the plan.... Benefits paid....... **********. Balance per actuary... December 31, 2013 $9,883,250 $9,062,500 575,000 (assume at year end) 306,250 Required 1- Prepare the pension expense and funding entries for 2013. Show all supporting calculations. Assume EBL reports pension expense relating to normal net income as one line item. Round amounts to the nearest dollar; no cents. Items Balance, Jan 1 Current Service cost Interest on DBO Past Service cost Expected earnings PA Benefits paid Acturial gain/ loss on DBO Acturial gain/ loss on Plan assets Annual Pension Expense Experience Gains/Loss OCI Cash Accrued pension liability/ asset Defined Benefit Obligation Plan Assets Ending total (1 mark each line- 10 marks total) NOTE: Please note debits as positive amounts and credits as negative in (brackets) Show calculations here: Required 2: What would be reported on the Statement of Financial Position at December 31, 2013 in respect of the pension? How would it be classified? (2 marks)
Expert Answer:
Answer rating: 100% (QA)
SOLUTION Based on the data provided here are some calculations for the year ended December 31 2013 Pension Expense Current service cost 100000 Interest cost on benefit obligation 11275000 100000 x 50 ... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
Posted Date:
Students also viewed these accounting questions
-
According to Rankine, the soil in the profile below could be in either passive or active state. The wall is 2.5m thick, unit weight of concrete is 25kN/m3. 20m 3.1. 3.2. 3.3. 100kPa p' = 30 Ybulk =...
-
Question 1 1. With the aid of a suitable supporting diagram, outline the purpose and key components of a Decision Support System (DSS). 2. With reference to the diagram you provided in your answer to...
-
An entity operates a defined benefit pension plan and changes it at the beginning of the current year to a defined contribution plan. The net pension liability after the plan amendment decreased...
-
Maria owns and runs her own online premium clothing business (sole trader) named "Maria's Clothing Solutions (MS). Her main competitor is "Brenda's Extraordinary Clothing (BC). She is interested in...
-
There are different product costs for different purposes. Name at least two purposes.
-
The following records of Hallmark Electronic Repair are presented in the working papers: Journal containing entries for the period May 131. Ledger to which the May entries have been posted. ...
-
United Airlines entered into a strategic alliance with Thai Airways to develop and market airline services. Would you characterize this strategic alliance as a global innovator, an integrated player,...
-
On January 2, 2008, two identical companies, Daggar Corp. and Bayshore Company, lease similar assets with the following characteristics: 1. The economic life is eight years 2. The term of the lease...
-
On December 31, 2022, the MSC Corporation granted a rental agreement for its facilities to another entity for $2,400 for a period of two years. The accountant recorded the following journal entry as...
-
Student researchers at Hope College conducted an experiment to determine whether students memorize material better if they are taking notes on paper using handwriting as opposed to taking notes on a...
-
A company manufactures and sells X television sets per month.The monthly cost and price demand equations areC(x)=75,000+60x=300-x/20, 0 less than or equal to x less than orequal to 6000.A) Find th 2...
-
Ed Proctor was reluctant to approach the explosive Manfred Davis on the subject of control over data files. Proctor had found a large number of tape reels stored at various locations in the computer...
-
To identify through sampling at least one suspected item and dine stop, use: a. Stop-or-go sampling. b. Discovery sampling. c. Mechanized sampling. d. Multistage sampling. e. Judgment sampling.
-
If internal auditors in a corporation have unrestricted access to all of its operations, how could they successfully respond to the assertion that they should be held responsible for the prevention...
-
Internal auditors can satisfy themselves about the reliability of a computer system before engaging in computer-assisted audits, through: a. Discussions with systems analysts. b. Examination of the...
-
Discuss three factors that internal audit sup)ervisors should consider when overseeing staff auditors on internal audit assignments.
-
D Question 1 1 pts One of the first steps in the employee recruitment process is to write a job that includes a summary of the job, a list its major tasks, and the identity of its supervisor. O...
-
6. (Potential Energy and Conservation of Energy) What should be the spring constant k of a spring designed to bring a 1200-kg car to rest from a speed of 95 km/h so that the occupants undergo a...
-
The Jolis Company has provided information on the following items: 1. A patent was purchased from the Totley Company for $500,000 on January 1, 2006. At that time, Jolis estimated the remaining...
-
The Brandt Company presents the following December 31, 2007 balance sheet: The following information is also available: 1. Current assets include cash $3,800, accounts receivable $18,500, notes...
-
When a company changes from FIFO to LIFO, what effect does the change have on its net income and working capital of the current period?
-
Can the purchase of a company by venture capitalists create value? And by trade buyers?
-
Why can we say that the mean or the median figure is the choice of an indecisive person?
-
Has a reduction in working capital of 1% the same impact on a DCF as a 1% improvement in the EBIT margin?
Study smarter with the SolutionInn App