Question

Micro Computers Inc. sponsors a defined benefit pension plan for its employees. It is now the 20x2 11scal year. Long-term corporate borrowing rates for companies with this risk profile are 4%. Information with respect to the pension plan is as follows: S 182,200 1,971,000 221,900 411,000 2,940,000 Current service cost for 20X2 Fair value of plan assets, 31 December 20X1 Benefits paid to retirees during 20X2 Funding payment at 1 February 20X2 Defined benefit obligation, 31 December 20X1 Past service cost from amendment dated 31 December 20X2: liability is reduced because benefits were reduced Actuarial revaluation dated 31 December 20X2: liability is increased because of changed salary increase assumptions Actual return on plan assets for 20X2 (loss) (120,000) 388,200 (108,300) Required: 1. Calculate the SFP net defined benefit pension llability as of 31 December 20X1. Net defined benefit pension liability, 31 December 20X1 2. Calculate the net defined benefit pension liability as of 31 December 20X2 by calculating the defined benefit obligation and the fair value of plan assets at 31 December 20x2. Defined benefit obligation, 31 December 20X2 Fair value of plan assets, 31 December 20X2 Net defined benefit pension liability, 31 December 20X2 3. Analyze the three elements of pension accounting for 20X2: service cost, net Interest, and remeasurements. Prepare entries, and also an entry for the contribution to the fund during 20X2. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Round your answers to nearest whole dollar.) View transaction llat Journal entry worksheet Record the service cost for 20x2. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general Journal 4-2. Calculate the SFP net defined benefit pension llability as of 31 December 20X2, reflecting requirement 1 and the entries In requirement 3. (Round your answers to nearest whole dollar.) Net defined benefit pension liability, 31 December 20X2

Answer 1

Beginning benefit obligation	$ 29,40,000
Service cost	$   1,82,200
Amendments	$ -1,20,000
Benefits Paid	$ -2,21,900
Actuarial Valuation difference	$   3,06,200
Closing benefit obligation	$ 30,86,500
Beginning Fair value of plan assets	$ 19,71,000
Actual returns on plan assets	$ -1,08,300
Employer Funding	$   4,11,000
Benefits Paid	$ -2,21,900
Ending Fair value of plan assets	$ 20,51,800
Net deferred benefit obligations	$ 10,34,700