QUESTION 4 (23 MARKS)

Davis Corporation sponsors a defined benefit pension plan for its employees. The Company follows IFRS. On January 1, 2018, the following balances related to this plan:

Plan assets (fair value) $620,000

Defined benefit obligation 850,000

Net defined benefit liability 230,000

As a result of the plans operation during 2018, the actuary provided the following additional data at December 31, 2018.

Service cost for 2018 $135,000

Discount rate 10%

Actual return on assets in 2018 57,000

Past service cost incurred at the end of year 27,000

Employer contributions made at the end of year 160,000

Benefits paid in 2018 120,000

Actuarial loss on DBO incurred at the end of year 50,000

Required:

1. Use the template on page #11 to complete the pension work sheet for year 2018.
2. Prepare expense and contribution entries.

(1)

	General Journal Entries				Memo Record
Items	Remeasurement Gain or Loss OCI	Annual Pension Expense	Cash	Net Defined Benefit Liability / Asset	Defined Benefit Obligation	Plan Assets
January 1, 2018
Current service cost
Net Interest /finance cost
Past service cost
Remeasurement gain or loss on plan assets
Contributions
Benefits paid
Actuarial loss on DBO
Expense entry
Contribution entry
December 31, 2018