Reference no: EM132885934
Question - Data regarding the defined benefit plan of Lao Company follow:
Fair value of plan assets, Jan. 1 1,000,000
Return on plan assets 500,000
Contributions to the fund 200,000
Present value of defined benefit obligation, Jan. 1 1,700,000
Current service cost 1,100,000
Benefits paid during the period 300,000
Discount rate 12%
Settlement price of DBO 60,000
Present value of DBO settled 25,000
Required -
1. How much is the net benefit asset (or liability) to be recognized in the statement of financial position on January 1 of the current year?
a. (1,339,000)
b. (700,000)
c. (1,700,000)
d. 1,000,000
2. How much is the net benefit asset (or liability) to be recognized in the statement of financial position on December 31 of the current year?
a. (2,679,000)
b. (700,000)
c. 1,340,000
d. (1,339,000)