Reference no: EM132987802

Questions -

Q1) The following information are taken from the actuarial valuation report for an entity's defined benefit plan:

Fair Value of Plan Assets, Jan. 1 = 2,100,000

Present Value of defined benefit obligation, Jan. 1 = 2,400,000

Past Service Cost (Vesting period is 5 years) = 300,000

Current Service Cost = 600,000

Benefits paid to retirees during the year = 450,000

Net gain on settlement of plan during the year = 60,000

Actuarial gain during the period = 15,000

Return on plan assets during the period = 270,000

Discount rate based on high quality corporate bonds = 12%

Required - Compute for define benefit cost. Determine the amounts recognized in profit or loss and in other comprehensive income, respectively.

Q2) Information of an entity's plan assets is shown below:

Fair Value of plan assets, Jan. 1 = 360,000

Return on Plan assets = 80,000

Contributions to the retirement fund during the year = 480,000

Benefits paid to retirees = 120,000

Actuarial gain = 60,000

Requirement - Compute for the balance of the fair value of plan assets as of year-end.