Question

P19-3 D’Eon Corporation reports the following January 1, 2017 balances for its defi ned benefi t pension plan, which it accounts for under IFRS: plan assets, $460,000; defi ned benefi t obligation, $460,000. Other data relating to three years of operation of the plan are as follows:

2017 36.800 10% 39,100 36800 Annual service cost Discount rate Actual return on plan assets Funding of current service cost Funding of past service cost Benefits paid Past service cost (plan amended, 1/1/18) Change in actuarial assumptions establishes a December 31, 2019 defined benefit obligation of 2018 $43,700 10% 50,370 43,700 69,000 37,720 368,000 2019 $59,800 10% 55,200 59,800 80,500 48,300 32,200 1,196,000

Instructions (a)

Prepare and complete a pension work sheet for 2017.

(b) Prepare a continuity schedule of the projected benefi t obligation over the three-year period.

(c) Prepare a continuity schedule of the plan assets over the three-year period.

(d) Determine the pension expense for each of 2017, 2018, and 2019.

(e) Prepare the journal entries to refl ect the pension plan transactions and events for each year.

Answer 1

Refer the below images for the above asked questions, in a detailed way of solution.

Solution a) prepare and complete a pension work sheet for 2017 : IFRS-2017 Merto Record General Journal Entries Remst Gain pension Loss Cock) Expense cash Net Defined DBO Benett Liability Asser plan Assets 460000 400000 opening balance Service cost 36800 DV. 36800 ODY 46000 46000 Or. 6900 Dr 69008 Net Int. fin.cast * Asset Remsmt. LOSS ** contributions Benefits paid Expenses entry 36800 cr 36800 OY 32 20 32 200 Dr. 6900 ls 36800 or. 43700 Funding entry 36800 36800 CY. DY- S03700 6900 cf. Това | Note points): * $0 = ($460000 - $460.000)x 10%. ; $46000 = $ 4600004104.; $ 46000 = $46000ot 10% ** $6900 = ($460000 7001.) - $ 39100

prepare a over the continuity three year of the projected Schedule period: benefit obligation particulars Destined benefit obligation lolit current service cost Interest cost (4460000 81040) Benefits paid out Detined benefit obtigation 12/30/17 $460000 36900 46000 (32200) $510600 Continuity of Defined Benefit obligation - 2018 Defined benefit obligation, 10118 past service cost 11e118 current Interest Benefits Defined service cost cost ($878600 X 10%) paid out benefit obligation , 12/31/18 $510600 368000 $878600 43100 87860 (377202 1972440 continuity of Defined Benefit obligation - 2019 $972440 $ 9800 97244 Defined Current Interest Benefits Actorial Defined benefit obtigation , alilig Service cost Cost ($ 972440x106) paid at loss, end of year * benefit obligation , 12/31/19 (48300) 114816 $1196000 * $ 114816 = $1196000-$972440 - $59800 - $ 97244 & & 48300

c) prepare the a three continuity schedule year perioda of the plan Assets over Particolars continuity of Fund Assets - 2017 plan assets, clolia Actual retorn on plan Assets Contributions Benefits paid out plan assets, 12/31/17 $460000 39100 36800 (32200) $ 503700 continuity of Fond Assets - 2018 plan assets, filig Actool return on plan assets contributions ($43700 + $ 69000) Benefits paid out plan assets, 12/31112 $563700 50370 112 700 (37720) $629050 continuity of Fund assets - 2019 plan assets, cloria Actual return on plan assets contributions (459200 + $ 80500) Benefits paid out plan assets, 12/31119 $629050 S5200 140300 (4836) $776250

Determine the pension expense for each of 2017, 2018 and 2019, particulars Amount $36800 pension expense -2017 corrent service cost net interest | finance cost : [640 ($ 460000 - $ 460.000)] -0- $36800 $43700 pension expense - 2018 Current service cost Net interest | finance cost : yon ($878600 - $503700) past service cost $ 37490 5 368000 $449190 $59800 pension expense - 2019 corrent service cost Net interest | finance cast! 107. (1972440 - $ 629050) $34339 $ 94139

e prepare the transactions soornal and entries events to for reflect the each year : pension plan year particolars Debt credit २०११ pension expense ale Remeasurement loss (6 To Net Defined $36806 $ 6900 Dr ) Alc DV Benefit trability/ Aset # 43700 Alo Dr $36800 Net Defined Benefit liability /4 ser To cash Al $36800 2018 pension expense Alc or $449190 To net defined Benefit Liability) Asset 449190 Wet $112700 Defined Benefit Liability / Asset Ale pr To cash ale 119900 2019 pension expenre Alc Dr $94139 Remeasurement loss (oco) Alc or $12252) To Not Defined Benefit Liability/asset $216660 Net $140300 Defined Benefit To cash Alc Liability asser Atc or $140300 Note pants: * ** $6900 = ($460000 *109.) - $39100 $122521 = ($ 629050 *10) - $ 55200 +$114816