Question 1

The following data applies to the defined-benefit pension plan of Parker plc.

Present value of obligation at start of 2021: 2,300,000

Fair value of defined benefit assets at start of 2021: 850,000

The following figures are relevant:

2021

000

Discount rate at beginning of year 6%

Current service cost 180

Past service cost 37

Benefits paid to retirees 170

Employer contributions 130

Present value of obligation at year end 2,765

Fair value of defined benefit assets at year end 930

Required

Record the T accounts and journal entries for the above defined benefit employee benefit plan.

Outline how the defined-benefit pension scheme would be shown in the financial statements of Parker plc for the year ended 31 December 2021 in accordance with IAS 19, Employee Benefits.