The following are the balances related to a defined benefit plan of Sheraton Company on

January 1, 2020.

Projected benefit obligation 7,000,000

Fair value of plan asset 6,250,000

The actuary provided the following data for the current year:

Current service cost 600,000

Settlement discount rate 10%

Expected return on plan assets 8%

Actual return on plan asset 700,000

Contribution to the plan 900,000

Benefit paid to retirees 100,000

7. What is the employee benefit cost?

a. 675,000

b. 600,000

c. 700,000

d. 650,000

8. What is the remeasurement gain on plan assets?

a. 75,000

b. 700,000

c. 125,000

d. 240,000

9. What is the defined benefit cost?

a. 300,000

b. 600,000

c. 900,000

d. 675,000

10. What is the prepaid/accrued benefit cost on December 31?

a. 400,000 prepaid

b. 400,000 accrued

c. 450,000 prepaid

d. 450,000 accrued

Problem:

Globe Company reported profit before tax of P 6,000,000 and income tax expense of

P1,000,000 for the current year. In addition, the entity paid during the year an ordinary

dividend of P500,000 and a preference dividend of P500,000 on the redeemable

preference shares. The entity had P2,000,000 of P10 par value ordinary shares in issue.

11. What amount should be reported as basic earnings per share for the year?

a. 25

b. 21.50

c. 20

d. 23.5