Reference no: EM132782541

Defined Benefit Plan; Assets and Defined Benefit Obligation:

Goodday Ltd. has a defined benefit pension plan and a December 31 year-end. The following information relates to the plan:

Balances:

Defined benefit obligation, end of 20X7            $5,215,000

Pension plan assets, fair value, end of 20X7      4,810,000

SFP net defined benefit liability, end of 20X7      405,000 cr.

SFP accumulated OCI, pension, end of 20X7        69,200 dr.

Retained earnings, end of 20X7                       8,601,400 cr.

20X8 earnings, prior to any pension expense            4,200,000 cr.

Current service cost for 20X8, measured using the projected unit credit method            601,900

New past service cost granted in 20X8, negative because benefits were reduced and the liability has declined  (356,000)

Contributions made to the pension plan assets paid at end of 20X8       450,000

Actuarial gain in 20X8, negative because caused by higher anticipated future mortality rates and the liability has declined  (106,000)

Actual earnings in the fund, reported by the pension fund trustee, including interest, dividends, and change in fair value     144,800

Benefits paid to pensioners from pension fund assets paid at end of 20X8        67,900

Interest rate on long-term corporate bonds, end of 20X8           5%

Required:

Problem 1. Complete the DBO schedule

Problem 2. Complete the journal entries