Big Corporation offers a defined benefit pension plan to all its eligible employees. The company uses the December 31 year end and uses IFRS to prepare its financial statements. It has reported a credit balance of $1,380,000 as at December 31, 2018 for its Net Defined Benefit Liability/Asset Account. The plan is underfunded by 20% of its Defined Benefit Obligation. The company also recorded, during 2019, $200,000 as Past Service Costs which were assumed to have accrued on January 1, 2019. The company determines its interest expenses and benefits on the balance existing at the beginning of the year. You are told that the company recorded $386,400 as the expected returns on Plan Assets for the year. $546,000 were recorded as current services costs during 2019. What would be the interest expense on the Defined Benefit Obligation for 2019? Given the actual rate of return on Plan Assets to be 6.25% and the expected returns on Plan Assets amounting to $386,400, what would be the OCI impact from gain or loss on Plan Assets?
Big Corporation offers a defined benefit pension plan to all its eligible employees. The company uses the December 31 year end and uses IFRS to prepare its financial statements. It has reported a credit balance of $1,380,000 as at December 31, 2018 for its Net Defined Benefit Liability/Asset Account. The plan is underfunded by 20% of its Defined Benefit Obligation. The company also recorded, during 2019, $200,000 as Past Service Costs which were assumed to have accrued on January 1, 2019. The company determines its interest expenses and benefits on the balance existing at the beginning of the year. You are told that the company recorded $386,400 as the expected returns on Plan Assets for the year. $546,000 were recorded as current services costs during 2019. What would be the interest expense on the Defined Benefit Obligation for 2019? Given the actual rate of return on Plan Assets to be 6.25% and the expected returns on Plan Assets amounting to $386,400, what would be the OCI impact from gain or loss on Plan Assets?
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 1E
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Big Corporation offers a defined benefit pension plan to all its eligible employees. The company uses the December 31 year end and uses IFRS to prepare its financial statements. It has reported a credit balance of $1,380,000 as at December 31, 2018 for its Net Defined Benefit Liability/Asset Account. The plan is underfunded by 20% of its Defined Benefit Obligation. The company also recorded, during 2019, $200,000 as Past Service Costs which were assumed to have accrued on January 1, 2019.
- The company determines its interest expenses and benefits on the balance existing at the beginning of the year. You are told that the company recorded $386,400 as the expected returns on Plan Assets for the year. $546,000 were recorded as current services costs during 2019. What would be the interest expense on the Defined Benefit Obligation for 2019?
- Given the actual rate of return on Plan Assets to be 6.25% and the expected returns on Plan Assets amounting to $386,400, what would be the OCI impact from gain or loss on Plan Assets?
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