TOPIC: EMPLOYEE BENEFITS The following selected post-retirement benefit accounts were lifted from the 2021 unadjusted trialbalance of EMM Corp. No adjusting entry had been made yet at year end in relation to the post-retirement benefits related accounts.Prepaid Pension Expense, January 1, 2021Pension expense for 2021, amount contributed to the planP 493,900P 500,000Additional information:The memorandum account balances and other off-books transactions are as follows:Plan asset at fair market value, January 1, 2021P 3,245,400P 2,751,500P 350,000P 300,000P 220,000P 535,000P 275,000Accumulated benefit obligation at present value, January 1, 2021Payments to retirees at scheduled retirement in 2021Payments to early retirees (settlement price) in 2021Carrying value of accrued benefits of early retirees in 2021Current service costPast service cost recognized in the current yearSettlement rate12%Plan asset at fair market value, December 31, 2021Accumulated benefit obligation at present value, December 31, 2021 P 3,852,100P 3,569,900There had been no remeasurement (actuarial) gain or loss from plan asset and accumulatedretirement obligation in the prior years.Required:1. What is the total pension expense in 2021?2. How much from the pension expense is recognized in the 2021 profit or loss?3. How much from the pension expense is recognized in the 2021 other comprehensiveincome or loss?4. What is the prepaid(accrued) pension expense as of December 31, 2021?

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The following selected post-retirement benefit accounts were lifted from the 2021 unadjusted trial balance of EMM Corp. No adjusting entry had been made yet at year end in relation to the post- retirement benefits related accounts.

The following selected post-retirement benefit accounts were lifted from the 2021 unadjusted trial balance of EMM Corp. No adjusting entry had been made yet at year end in relation to the post- retirement benefits related accounts.

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 6RE

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The following selected post-retirement benefit accounts were lifted from the 2021 unadjusted trial balance of EMM Corp. No adjusting entry had been made yet at year end in relation to the post-retirement benefits related accounts. Prepaid Pension Expense, January 1, 2021 ₱ 493,900Pension expense for 2021, amount contributed to the plan ₱ 500,000Additional information:The memorandum account balances and other off-books transactions are as follows:Plan asset at fair market value, January 1, 2021 ₱ 3,245,400Accumulated benefit obligation at present value, January 1, 2021 ₱ 2,751,500Payments to retirees at scheduled retirement in 2021 ₱ 350,000Payments to early retirees (settlement price) in 2021 ₱ 300,000Carrying value of accrued benefits of early retirees in 2021 ₱ 220,000Current service cost ₱ 535,000Past service cost recognized in the current year ₱ 275,000Settlement rate 12%Plan asset at fair market value, December 31, 2021 ₱ 3,569,900Accumulated benefit obligation at present value,…
When Turner Company adopted its defined benefit pension plan on January 1, 2019, it awarded retroactive benefits to its employees. These retroactive benefits resulted in a prior service cost of $980,000 that created a projected benefit obligation of the same amount on that date (which it did not fund). Turner decided to amortize the prior service cost using the years-of-future-service method. Turner’s actuary and funding agency have provided the following additional information for 2019 and 2020: (1) service cost: 2019, $187,000; 2020, $189,000; (2) plan assets: 1/1/2019, $0; 1/1/2020, $342,000; (3) expected long-term (and actual) rate of return on plan assets: 2020, 9%; (4) discount rate for both 2019 and 2020: 8%; and (5) amortization fraction for prior service cost: 2019, 80/980; 2020, 79/980. Turner contributed $342,000 and $336,000 to the pension fund at the end of 2019 and 2020, respectively. No retirement benefits were paid in either year. There are no other components of…
Blue Corp., provides a noncontributory defined-benefit pension plan for its employees. The company's actuary has provided the following information for the year ended December 31, 2021:Defined benefit obligation, Dec.31, 2021 - P600,000Fair value of plan assets, Dec.31, 2021 - 825,000Service cost - 240,000Interest on defined benefit obligation - 24,000Past service cost - 60,000Expected return and interest revenue on plan assets - 33,000In its December 31, 2021 statement of financial position, Blue Corporation reported a pension asset/ liability of Choices: Pension liability of P600,000 Pension asset of P824,000 Pension asset of P225,000 Pension liability of P525,000
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Pharoah Corp., a company whose stock is publicly traded, provides a noncontributory defined-benefit pension plan for its employees. The company's actuary has provided the following information for the year ended December 31, 2021: Projected benefit obligation $ 766000 Accumulated benefit obligation 577000 Fair value of plan assets 900000 Service cost 260000 Interest on projected benefit obligation 28000 Amortization of prior service cost 68000 Expected and actual return on plan assets 94500 The market-related asset value equals the fair value of plan assets. No contributions have been made for 2021 pension cost. In its December 31, 2021 balance sheet, Pharoah should report a pension asset / liability of Pension asset of $134000 Pension asset of $900000 Pension liability of $766000 Pension liability of $577000
On January 1, 2021 the memorandum records of Dakak Company’s defined benefit plan showed the following: Fair value of plan assets P 14,000,000 Unamortized past service cost 700,000 Unrecognized actuarial loss 2,000,000 Projected benefit obligation (15,000,000) Prepaid/accrued benefit cost – debit P 1,700,000 During 2021, the entity determined that its current service cost was P2,000,000 and the interest cost is 10%. The expected return on plan assets was 10% but the actual return during the year was 12%. Past service cost and any actuarial gain or loss should be amortized over 10 years. Other related information is as follows: Contribution to the plan P 2,400,000 Benefits paid to retirees during 2011 3,000,000 Decrease in accrued benefit obligation due to changes in actuarial assumption 400,000 a. What should be reported in the income…
Sandhill Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances relate to this plan. Plan assets $458,800 Projected benefit obligation 574,100 Pension asset/liability 115,300 Accumulated OCI (PSC) 103,900 Dr. As a result of the operation of the plan during 2020, the following additional data are provided by the actuary. Service cost $94,400 Settlement rate, 8% Actual return on plan assets 54,600 Amortization of prior service cost 19,100 Expected return on plan assets 51,500 Unexpected loss from change in projected benefit obligation, due to change in actuarial predictions 75,700 Contributions 101,100 Benefits paid retirees 86,700 (a) Using the data above, compute pension expense for Sandhill Corp. for the year 2020 by preparing a pension worksheet. (Enter all amounts as positive.) SANDHILL CORP.Pension Worksheet General Journal…
During 2019, the Electric Company experienced a difference between its expected and actual projected benefit obligation. At the beginning of 2020, Electric's actuary notified them of the following accumulated information related to their plan: Net loss (1/1/2020) $165,000 Actual projected benefit obligation (1/1/2020) $356,000 Fair value of plan assets (1/1/2020) $865,000 On December 31, 2020, Electric is in the process of calculating the net gain or loss to include in its pension expense for 2020. The average remaining service life of its employees is 10 years and there are no differences between the company's expected and annual rate of return on plan assets in 2020. Required:Compute the amount of the net gain or loss to include in the pension expense for 2020. Note whether it is an addition or subtraction to the pension expense.
At the end of 2020, the balances in the accounts related to the defined benefit pension plan of the Norton Company were as follows: Projected benefit obligation 690,000 Unrecognized prior service cost (remainder to be amortized over 12 years) 37,750 Unrecognized net loss 123,000 Plan assets (at fair value) 722,625 On 1/1/21, Norton amended the plan to provide an increased amount of pension benefits; the prior service cost resulting from this amendment was $45,500. At 1/1/21, the average remaining service life of employees expected to receive benefits was 10 years. The following information relates to the year 2021: Service Cost 70,625 Settlement rate 5% Expected rate of return on plan assets 4% Plan contribution (at year-end) 103,500 Benefit payments to retirees (at year-end) 90,750 In 2021, Norton’s actual return on plan assets was $27,500. Norton follows a policy of recognizing gains/losses on a delayed basis using the "corridor approach". At the end of 2021, there was one change in…
On January 1, 2019, James Company adopted a defined benefit pension plan. At that time, James awarded retroactive benefits to its employees, resulting in a prior service cost that created a projected benefit obligation of $1,250,000 on that date (which it did not fund). James decided to amortize the prior service cost by the straight-line method over the 20-year average remaining service life of its active participating employees. James' actuary has also provided the following additional information for 2019 and 2020: (1) service cost: 2019, $145,000; 2020, $152,000; (2) expected (and actual) return on plan assets: 2020, $34,000; and (3) projected benefit obligation: 1/1/2020, $1,520,000. The discount rate was 10% in both 2019 and 2020. James contributed $330,000 and $350,000 to the pension fund at the end of 2019 and 2020, respectively. There are no other components of James' pension expense. Required: 1. Compute the amount of James' pension expense for 2019 and 2020. 2. Prepare…