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QUESTION 3 Hivebee limited has a defined benefit plan that pays retirement benefits to all participating employees. Beehive limited contributes to the fund. Employee benefits
QUESTION 3 Hivebee limited has a defined benefit plan that pays retirement benefits to all participating employees. Beehive limited contributes to the fund. Employee benefits pald are determined using a formula that incorporates the number of years employed and the salary level of the members upon retirement Details of the fund are as follows: N$ Fair value of plan asset at 1 January 2018 Fair value of plan asset at 31 December 2018 Present value of plan obligation at 1t January 2018 Present value of plan obligation at 31" December 2018 Actual retun on plan asset Current year's service costs Payments made to the fund by company Benefits paid by fund Past service cost Rate on long-term high quality corporate bonds Required: 6 000 000 6 500 000 6 900 000 7 700 000 700 000 1 000 000 900 000 1 100 000 150 000 10% (a) Calculate the employee benefit expense to be recognised in profit or loss (5) (b) Calculate the re-measurement of the net defined liability lasset to be recognised in other comprehensive income (4) (c) Prepare the journal entries for the defined benefit plan for the year ended 31 December 2018. (16) END OF ASSIGNMENT TWO Page 18 of 18 QUESTION 3 Hivebee limited has a defined benefit plan that pays retirement benefits to all participating employees. Beehive limited contributes to the fund. Employee benefits pald are determined using a formula that incorporates the number of years employed and the salary level of the members upon retirement Details of the fund are as follows: N$ Fair value of plan asset at 1 January 2018 Fair value of plan asset at 31 December 2018 Present value of plan obligation at 1t January 2018 Present value of plan obligation at 31" December 2018 Actual retun on plan asset Current year's service costs Payments made to the fund by company Benefits paid by fund Past service cost Rate on long-term high quality corporate bonds Required: 6 000 000 6 500 000 6 900 000 7 700 000 700 000 1 000 000 900 000 1 100 000 150 000 10% (a) Calculate the employee benefit expense to be recognised in profit or loss (5) (b) Calculate the re-measurement of the net defined liability lasset to be recognised in other comprehensive income (4) (c) Prepare the journal entries for the defined benefit plan for the year ended 31 December 2018. (16) END OF ASSIGNMENT TWO Page 18 of 18
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