Find what the entry reflected in the employer books

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Reference no: EM132973188

Hi-Flie-Ing 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.

Problem 1: Each year, the company makes a contribution to the plan at the end of the year. For 2019, this contribution amounted to 30% of the deficit in funding reported at the end of 2018. The entry reflected in the employer's books of accounts should show

a. DEBIT-Accrued Pension Asset/Liability [$414,000]; CREDIT-Cash [$414,000].
b. DEBIT-Accrued Pension Asset/Liability [$474,000]; CREDIT-Cash [$474,000].
c. DEBIT-Pension Expenses [$414,000]; CREDIT-Cash [$414,000].
d. DEBIT-Pension Expenses [$474,000]; CREDIT-Cash [$474,000].
e. DEBIT-Contribution Surplus [$414,000]; CREDIT-Cash [$414,000].

Reference no: EM132973188

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