Question

Question 4 of 10 -/5 View Policies Current Attempt in Progress At January 1, 2020. Crane Corporation had plan assets of $256.500 and a defined benefit obligation of the same amount based on projected costs. During 2020, the current service cost was $28.550, the discount rate on the DBO and plan assets was 10%, actual return on plan assets was $31,500, contributions by Crane were $21,050, benefits paid were $17.500, and the cost of past service benefits granted effective December 31, 2020, was $29,000 Prepare a pension work sheet for Crane Corporation for 2020 assuming that Crane follows IFRS. CRANE CORPORATION Pension Worksheet-2020 General Journal Entries Annual Pension Expense Remeasurement (Gain) Loss (OCD) Item $ Balance, 1/1/20 0 $ 0 Service cost 28550 Dr. Net interest/finance cost : Remeasurement gain on plan assets :

Answer 1

Effective Charging Rate = (1 + Rate of expected return)^0.5 - 1

= (1 + 0.10)^1/2 - 1

= 4.88%

Present Value of Defined Benefit Obligation Account (e.g. Pension)
Particulars	$	Particulars	$
To	Bank Account (Benefit paid)	$     17,500	By	Opening Balance	$ 256,500
			By	Current Service Cost	$    28,550
			By	Interest	$    25,578
				($256500*4.88%+ $267550*4.88%)
			By	Past service benefits granted	$    29,000
To	Closing Balance	$   322,128
		$   339,628			$ 339,628
Plan Assets Account
Particulars	$	Particulars	$
To	Opening Balance	$   256,500	By	Bank Account (Sold)	$    17,500
To	Expected return on assets	$     25,208
To	Bank Account (Purchase)	$     21,050
To	Remeasurement Loss	$        6,292
	(Transferred to OCI)
			By	Closing Balance	$ 291,550
			($256500+$31500+$21050-$17500)
		$   309,050			$ 309,050

Note: Assuming all investment & withdrawal at mid of year.