The following three transactions are related to TQF’s employees during 2020:

a) TQF offers parental benefits to its staff as a top-up on EI benefits so that employees end up receiving 100% of their salary for a minimum of 12 months of parental leave. Joanne Adams, the Director of Marketing for TQF, who earns $ 90,000 per annum, announced that she will be taking parental leave for a period of 25 weeks starting on December 1, 2020.. The Employment Insurance program pays her a maximum of $ 800 per week for 17 weeks.

b) At the end of 2020, TQF issued preferred shares in the amount of $ 15,000 to one key employee, Gary Roberts. The shares have a rate of return of 4% per annum and are cumulative, redeemable and retractable in two years’ time at face value plus dividends in arrears, if any.

c) The following is related to the pension plan that TQF has established:

(1) For 2020, the service cost for TQF employees is projected by the actuary to be $236,000. The current service cost is credited at the end of each fiscal year. Nothing has been recorded in the financials to reflect this.

(2) The actuary has reviewed the new plan and determined that the past service costs for existing employees is $96,000. TQF has not yet reflected this in its current results and is unclear on how to accurately report this in its financial statements. TQF employees would be eligible for full benefits after a one-year vesting period.

(3) TQF's current borrowing rate and settlement rate is 7%. TQF's management has specifically ruled out the option of purchasing an insurance contract for the future settlement of its pension liability. The current interest rate on high-quality corporate bonds is 8%.

(4) The plan paid only $34,000 in benefits to its retirees for 2020 and TQF contributed $88,000 to the plan throughout the year.

(5) Due to declining economic conditions, the actuary has revised its assumptions for age of retirement and final salary. This has resulted in an actuarial loss of $55,000. TQF must also account for an actuarial loss of $19,000 resulting from differences in past assumptions and actual costs (experience losses). This has not yet been accounted for in the statements.

(6) The actual return on plan assets was $16,500, significantly lower than projected.

(7) The defined benefit obligation as determined by the actuarial valuation is the one used for accounting purposes. The fair value of the plan assets was $980,000 at the end of 2019.

(8) Net defined benefit liability at the end of 2019 is $ 2,165,000.