You are the auditor of Ivanhoe Inc., the Canadian subsidiary of a public multinational engineering company that offers a defined benefit pension plan to its eligible employees. Employees are permitted to join the plan after two years of employment, and benefits vest immediately. You have received the following information from the fund trustee for the year ended December 31, 2020: Discount rate 5% Rate of compensation increase 4% Defined Benefit Obligation Defined benefit obligation at January 1, 2020 $11,898,420 Current service cost 393,830 Interest cost 594,921 Benefits paid 739.963 Actuarial loss, end of period 586,639 Plan Assets Fair value of plan assets at January 1, 2020 9,757,880 Actual return on plan assets, net of expenses 1,104,080 Employer contributions 527,018 86,335 Employee contributions Benefits paid 739,963 Other relevant information: 1. The net defined benefit liability on January 1, 2020, is $2,140,540. 2. Employee contributions to the plan are withheld as payroll deductions, and are remitted to the pension trustee along with the employer contributions. ! - Your answer is partially correct. Prepare a pension work sheet for the company. Assume IFRS is followed. Remeasurement (Gain) Loss (OCI) ) Annual Pension Expense Items Balance, Jan 1, 2020 $ (a) Service cost 00 393830 [ (b) Net interest/finance cost (c) Asset remeasurement gain Cr. (d) Actuarial loss, liability 594921 Dr. NNNNNNNNN (e) Employee contributions 86335 (f) Benefits paid (g) Employer payment into fund Expense entry, 12/31/20 Cr. Net funding entry Balance, Dec. 31, 2020 Prepare a pension work sheet for the company. Assume IFRS is followed. Ivanhoe Inc. Pension Work Sheet General Journal Entries Net Def. Ben. Liability/ Asset Cash 2140540 Cr. Dr. Dr. Cr. 86335 Dr. Cr. Dr. Cr. Cr. Dr. Cr. Prepare a pension work sheet for the company. Assume IFRS is followed. Memo Record ty/ Defined Benefit Obligation Plan Assets Cr. 11898420 Cr. $ 9757880 Dr. 393830 Cr. 594921 Cr. Dr. Dr. 586639 Cr. dododigiosi 739963 Dr. 739963 Cr. Dr. Cr. Dr. Cr. Cr. $ Dr. Prepare the employer's journal entries to reflect the accounting for the pension plan for the year ended December 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit December 31 2020 Pension Expense Remeasurement Gain (OCI) Net Defined Benefit Liability/Asset (To record pension expense.) December 31, 2020 Net Defined Beneft Liability/Asset Cash (To record contributions to the pension fund.) e Textbook and Media X Your answer is incorrect. Prepare a schedule reconciling the plan's surplus or deficit with the pension amounts reported on the December 31, 2020 SFP. Ivanhoe Inc. Pension Reconciliation Schedule-2020 e Textbook and Media Your answer is incorrect. Assume that interest rates are falling, and that the rate of compensation increase is expected to fall as well. What effect is this likely to have on the surplus or deficit of the plan? Effect of interest rate falling increase Effect of rate of compensation increase You are the auditor of Ivanhoe Inc., the Canadian subsidiary of a public multinational engineering company that offers a defined benefit pension plan to its eligible employees. Employees are permitted to join the plan after two years of employment, and benefits vest immediately. You have received the following information from the fund trustee for the year ended December 31, 2020: Discount rate 5% Rate of compensation increase 4% Defined Benefit Obligation Defined benefit obligation at January 1, 2020 $11,898,420 Current service cost 393,830 Interest cost 594,921 Benefits paid 739.963 Actuarial loss, end of period 586,639 Plan Assets Fair value of plan assets at January 1, 2020 9,757,880 Actual return on plan assets, net of expenses 1,104,080 Employer contributions 527,018 86,335 Employee contributions Benefits paid 739,963 Other relevant information: 1. The net defined benefit liability on January 1, 2020, is $2,140,540. 2. Employee contributions to the plan are withheld as payroll deductions, and are remitted to the pension trustee along with the employer contributions. ! - Your answer is partially correct. Prepare a pension work sheet for the company. Assume IFRS is followed. Remeasurement (Gain) Loss (OCI) ) Annual Pension Expense Items Balance, Jan 1, 2020 $ (a) Service cost 00 393830 [ (b) Net interest/finance cost (c) Asset remeasurement gain Cr. (d) Actuarial loss, liability 594921 Dr. NNNNNNNNN (e) Employee contributions 86335 (f) Benefits paid (g) Employer payment into fund Expense entry, 12/31/20 Cr. Net funding entry Balance, Dec. 31, 2020 Prepare a pension work sheet for the company. Assume IFRS is followed. Ivanhoe Inc. Pension Work Sheet General Journal Entries Net Def. Ben. Liability/ Asset Cash 2140540 Cr. Dr. Dr. Cr. 86335 Dr. Cr. Dr. Cr. Cr. Dr. Cr. Prepare a pension work sheet for the company. Assume IFRS is followed. Memo Record ty/ Defined Benefit Obligation Plan Assets Cr. 11898420 Cr. $ 9757880 Dr. 393830 Cr. 594921 Cr. Dr. Dr. 586639 Cr. dododigiosi 739963 Dr. 739963 Cr. Dr. Cr. Dr. Cr. Cr. $ Dr. Prepare the employer's journal entries to reflect the accounting for the pension plan for the year ended December 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit December 31 2020 Pension Expense Remeasurement Gain (OCI) Net Defined Benefit Liability/Asset (To record pension expense.) December 31, 2020 Net Defined Beneft Liability/Asset Cash (To record contributions to the pension fund.) e Textbook and Media X Your answer is incorrect. Prepare a schedule reconciling the plan's surplus or deficit with the pension amounts reported on the December 31, 2020 SFP. Ivanhoe Inc. Pension Reconciliation Schedule-2020 e Textbook and Media Your answer is incorrect. Assume that interest rates are falling, and that the rate of compensation increase is expected to fall as well. What effect is this likely to have on the surplus or deficit of the plan? Effect of interest rate falling increase Effect of rate of compensation increase