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Question 2 In the year 2017, Sumaiyah Cosmetics Sdn Bhd (SCSB) decide to give extra employee benefits to their staff in term of gratuity payment

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Question 2 In the year 2017, Sumaiyah Cosmetics Sdn Bhd (SCSB) decide to give extra employee benefits to their staff in term of gratuity payment for years of services upon retirement. SCSB decided to contribute to Defined Benefit Plan. At the end of the year, SCSB estimated that the plan present obligation on the benefit scheme was RM120,000 using 10% discount rate. SCSB contributed the same amount to a third party to manage the plan assets. In year 2018 , the professional actuary assumes that the return on plan assets will be 20% and the value of the present obligation is RM130,000. The current year service cost is RM130,000 and the contribution to the plan assets is RM125,000. The fair value of the plan assets at the end of year 2017 is RM150,000. An employee retired and RM10,000 is paid. Contributions to the fund and benefits are paid at the end of the year. Required: a) Calculate the Defined Benefit Plan that SCSB will recognize in their accounts. b) You are required to journalize the transactions as well. c) Prepare an extract of SCSB's Statement of Profit or Loss for the year ended 2017. Question 2 In the year 2017, Sumaiyah Cosmetics Sdn Bhd (SCSB) decide to give extra employee benefits to their staff in term of gratuity payment for years of services upon retirement. SCSB decided to contribute to Defined Benefit Plan. At the end of the year, SCSB estimated that the plan present obligation on the benefit scheme was RM120,000 using 10% discount rate. SCSB contributed the same amount to a third party to manage the plan assets. In year 2018 , the professional actuary assumes that the return on plan assets will be 20% and the value of the present obligation is RM130,000. The current year service cost is RM130,000 and the contribution to the plan assets is RM125,000. The fair value of the plan assets at the end of year 2017 is RM150,000. An employee retired and RM10,000 is paid. Contributions to the fund and benefits are paid at the end of the year. Required: a) Calculate the Defined Benefit Plan that SCSB will recognize in their accounts. b) You are required to journalize the transactions as well. c) Prepare an extract of SCSB's Statement of Profit or Loss for the year ended 2017

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