A director of Mirabel Company shall receive a retirement benefit of 10% of the final salary per annum for a contractual period of three years. The director does not contribute to the scheme. The anticipated salary over three years is P1,200,000 for 2019, P1,000,000 for 2020 and P1,400,000 for 2021. The discount rate is 5%. Using the projected unit credit method, what is the estimated pension liability on December 31, 2020?

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter19: Accounting For Post Retirement Benefits
Section: Chapter Questions
Problem 3RE: Pinecone Company has plan assets of 500,000 at the beginning of the current year and expects to earn...
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A director of Mirabel Company shall receive a retirement benefit of 10% of the final salary per annum for a contractual period of three years. The director does not contribute to the scheme. The anticipated salary over three years is P1,200,000 for 2019, P1,000,000 for 2020 and P1,400,000 for 2021. The discount rate is 5%. Using the projected unit credit method, what is the estimated pension liability on December 31, 2020?

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