Reference no: EM133010202
Question - Urban Life Ltd. sponsors a defined benefit pension plan for its employees. It is now the 20X9 fiscal year. An appropriate interest rate for long-term debt is 6%. Information with respect to the plan is as follows:
Fair value of plan assets, 31 December 20X8 $5,488,000
Defined benefit obligation, 31 December 20X8 6,679,000
Actual return on plan assets for 20X9 62,900
Past service cost from amendment dated 31 December 20X9, liability is reduced because benefits were reduced (221,200)
Actuarial revaluation dated 31 December 20X9; liability is reduced because of changed mortality assumptions (621,700)
Funding payment at year-end 20X9 540,000
Benefits paid to retirees during 20X9 123,000
Current service cost for 20X9 259,400
Required -
1. Calculate the SFP net defined benefit pension liability as of 31 December 20X8.
2. Calculate the net defined benefit pension liability as of 31 December 20X9 by calculating the defined benefit obligation and the fair value of plan assets at 31 December 20X9.
3. Analyze the three elements of pension accounting for 20X9: service cost, net interest, and remeasurements. Prepare entries, and also an entry for the contribution to the fund during 20X9.
4-a. Calculate the SFP net defined benefit pension liability as of 31 December 20X9, reflecting requirement 1 and the entries in requirement 3.
4-b. Not available in connect.
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