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FMC Inc. provides its employees with a defined benefit pension plan. Details are as follows: Present value defined benefit obligation (DBO) - December 31, 2020 Plan assets - December 31, 2020 Plan's actuary confirmed that 4% is the appropriate interest rate to $7,000,000 $5,900,000 use. Current service costs (CSC) for the year Past service costs (PSC) (improvement in benefits) - January 1, 2020 Expected ending DBO- December 31, 2020 Expected ending plan assets - December 31, 2020 Remitted to pension trustee- evenly throughout year Payments to retirees- evenly throughout year $590,000 $60,000 $7,200,000 $6,500,000 $670,000 $640,000 What journal entry should FMC prepare to record the remeasurement gains/losses and actuarial gains/losses for the year? ASsume FMC reports under IFRS. a) DR OCI - actuarial losses 200,000 DR OCI - losses on remeasurement of plan assets 600,000 CR Net defined benefit liability 800,000 DR OCI- actuarial losses b) DR Net defined benefit liability 200,000 400,000 CR OCI - gains on remeasurement of plan assets 600,000 DR Net defined benefit liability CR OCI - actuarial gains CR OCI 800,000 200,000 gains on remeasurement of plan assets 600,000 O d) DR OCI losses on remeasurement of plan assets CR OCI CR Net defined benefit liability 600,000 actuarial gains 200,000 400,000

FMC Inc. provides its employees with a defined benefit pension plan. Details are as follows: Present value defined benefit obligation (DBO) - December 31, 2020 Plan assets - December 31, 2020 Plan's actuary confirmed that 4% is the appropriate interest rate to $7,000,000 $5,900,000 use. Current service costs (CSC) for the year Past service costs (PSC) (improvement in benefits) - January 1, 2020 Expected ending DBO- December 31, 2020 Expected ending plan assets - December 31, 2020 Remitted to pension trustee- evenly throughout year Payments to retirees- evenly throughout year $590,000 $60,000 $7,200,000 $6,500,000 $670,000 $640,000 What journal entry should FMC prepare to record the remeasurement gains/losses and actuarial gains/losses for the year? ASsume FMC reports under IFRS. a) DR OCI - actuarial losses 200,000 DR OCI - losses on remeasurement of plan assets 600,000 CR Net defined benefit liability 800,000 DR OCI- actuarial losses b) DR Net defined benefit liability 200,000 400,000 CR OCI - gains on remeasurement of plan assets 600,000 DR Net defined benefit liability CR OCI - actuarial gains CR OCI 800,000 200,000 gains on remeasurement of plan assets 600,000 O d) DR OCI losses on remeasurement of plan assets CR OCI CR Net defined benefit liability 600,000 actuarial gains 200,000 400,000

Intermediate Accounting: Reporting And Analysis
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 4E
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FMC Inc. provides its employees with a defined benefit pension plan. Details are as follows: $7,000,000 Present value defined benefit obligation (DBO) – December 31, 2020 $5,900,000 Plan assets - December 31, 2020 Plan's actuary confirmed that 4% is the appropriate interest rate to use. $590,000 Current service costs (CSC) for the year Past service costs (PSC) (improvement in benefits)- January 1, 2020 Expected ending DBO – December 31, 2020 Expected ending plan assets Remitted to pension trustee – evenly throughout year Payments to retirees- evenly throughout year $60,000 $7,200,000 $6,500,000 $670,000 $640,000 December 31, 2020 What journal entry should FMC prepare to record the remeasurement gains/losses and actuarial gains/losses for the year? Assume FMC reports under IFRS. DR OCI - actuarial losses a) DR OCI - losses on remeasurement of plan 200,000 assets 600,000 CR Net defined benefit liability 800,000 DR OCI - actuarial losses b) DR Net defined benefit liability 200,000 400,000 CR OCI - gains on remeasurement of plan assets 600,000 Mail DR Net defined benefit liability c) 800,000 CR OCI actuarial gains Bartleby Learn It's official. Your password h changed. 200,000 CR OCI - gains on remeasurement of plan assets 600,000 d) assets DR OCI - losses on remeasurement of plan Gmail 2 600,000 CR OCI - actuarial gains CR Net defined benefit liability 200,000 400,000 Set flag Archive
Transcribed Image Text:FMC Inc. provides its employees with a defined benefit pension plan. Details are as follows: $7,000,000 Present value defined benefit obligation (DBO) – December 31, 2020 $5,900,000 Plan assets - December 31, 2020 Plan's actuary confirmed that 4% is the appropriate interest rate to use. $590,000 Current service costs (CSC) for the year Past service costs (PSC) (improvement in benefits)- January 1, 2020 Expected ending DBO – December 31, 2020 Expected ending plan assets Remitted to pension trustee – evenly throughout year Payments to retirees- evenly throughout year $60,000 $7,200,000 $6,500,000 $670,000 $640,000 December 31, 2020 What journal entry should FMC prepare to record the remeasurement gains/losses and actuarial gains/losses for the year? Assume FMC reports under IFRS. DR OCI - actuarial losses a) DR OCI - losses on remeasurement of plan 200,000 assets 600,000 CR Net defined benefit liability 800,000 DR OCI - actuarial losses b) DR Net defined benefit liability 200,000 400,000 CR OCI - gains on remeasurement of plan assets 600,000 Mail DR Net defined benefit liability c) 800,000 CR OCI actuarial gains Bartleby Learn It's official. Your password h changed. 200,000 CR OCI - gains on remeasurement of plan assets 600,000 d) assets DR OCI - losses on remeasurement of plan Gmail 2 600,000 CR OCI - actuarial gains CR Net defined benefit liability 200,000 400,000 Set flag Archive
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