Question
The following data pertains to a defined benefit (DB) pension plan: defined benefit obligation, December 31, 2015 30,000 long-term interest rate on corporate bonds 8%
The following data pertains to a defined benefit (DB) pension plan:
defined benefit obligation, December 31, 2015 30,000
long-term interest rate on corporate bonds 8%
past service cost, December 31, 2016, benefits and
liability reduced (1,300)
actuarial revaluation, December 31, 2016, change in
mortality assumptions, increased liability 600
actual return on plan assets - 2016 2,100
fair value of plan assets, December 31, 2015 20,000
funding payment at December 31, 2016 4,000
benefits paid to retirees - 2016 2,000
current service cost - 2016 1,900
Required:
- Calculate the three pension accounting elements and journal entries for service cost, net interest and revaluations for 2016. (5 marks)
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