Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are the controller of a newly established technology firm that is offering a new pension plan to its employees. The plan was established on

You are the controller of a newly established technology firm that is offering a new pension plan to its employees. The plan was established on January 1, 2020, with an initial contribution by the employer equal to the actuarial estimate of the past service costs for the existing group of employees. These employees are expected to continue to work for the firm for 20 years, on average, before retirement. The company is considering going public in the next five years, and the president has asked you to keep her aware of the accounting changes in moving from ASPE to IFRS. She wants to be sure that the company always chooses the accounting policies that are closest to IFRS so that changes in the future when the company goes public will be minimized. In addition, she is interested in demonstrating a history of profits so that the company can be taken public successfully. The following information is available for you to work with. 2020 2021 2022 Fair value of plan assets, beginning of year* $70,000 ? ? DBO for funding purposes, beginning of year* 65,000 ? ? DBO for accounting purposes, beginning of year* 70,000 ? ? Current service cost for year 14,000 15,000 16,500 Discount rate 8% 8% 8% Past service costs granted, January 1 70,000 0 0 Actual earnings on plan assets 6,200 9,700 7,700 Employer contributions for the year 14,000 17,000 18,000 Benefits paid to retirees by trustee 0 4,000 5,000 *After the initial $70,000 contribution. (a)Without using a pension work sheet, determine the surplus or deficit position of the pension plan and the amount reported on the SFP at each year end, the pension expense for each of the three years, and any remeasurement (gain) loss recorded in OCI for each of the three years, applying IFRS. (Round answers to 0 decimal places, e.g. 5,275.) Pension Surplus CR/Dr - 2020,2021,2022 Pension Expense-2020,2021,2022 Remeasurement gain or loss - 2020,2021,2022 (b) Without using a pension work sheet, determine the surplus or deficit position of the pension plan and the amount reported on the balance sheet at each year end, and the pension expense for each of the three years, applying ASPE. Pension Surplus CR/Dr - 2020,2021,2022 Pension Expense-2020,2021,2022

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

A Journey Into Auditing Culture

Authors: Grant Thornton United Kingdom, Susan Jex, Eddie J. Best

1st Edition

1634540565, 978-1634540568

More Books

Students also viewed these Accounting questions

Question

What is a cost objective?

Answered: 1 week ago

Question

Evaluate the importance of the employee handbook.

Answered: 1 week ago

Question

Discuss the steps in the progressive discipline approach.

Answered: 1 week ago