Reference no: EM132760553

Questions -

Q1. Crane Corporation provides the following information about its defined benefit pension plan (in hundreds of thousands of dollars) for 2020:

Actual return on plan assets $8

Current service cost $24

Contributions from employer 25

Opening balance, DBO 100

Benefits paid to retirees 10

Opening balance, plan assets 100

Actuarial loss due to change in actuarial assumptions 15

At the end of the year, Crane revised the terms of its pension plan, which resulted in past service costs of $35.

Assuming that Crane applies an 15% interest cost and follows IFRS, determine the company's 2020 pension expense and the effect of the pension plan on the company's shareholders' equity.

Q2. Crane Corporation has the following information available concerning its post-retirement benefit plan for 2020:

Current service cost $80,850

Interest cost on DBO, discount rate at 6% 65,650

Return on plan assets, using 6% discount rate 47,800

Actual return on plan assets for 2020 54,950

a. Assuming Crane follows IFRS, calculate Legacy's 2020 post-retirement benefit expense that will be included in net income.

b. Assuming Crane follows ASPE, calculate Legacy's 2020 post-retirement benefit expense that will be included in net income.