Make the journal entry to record pension expense

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Problem - Dharma Initiative, Inc., has a defined benefit pension plan. Characteristics of the plan during 2016 are as follows:

The expected long-term rate of return on plan assets was 8%. There were no AOCI balances related to pensions on January 1, 2016, but at the end of 2016, the company amended the pension formula creating a prior service cost of $24 million. Dharma Initiative prepares its financial statements according to International Financial Reporting Standards (IFRS).

($ in 000s) DBO balance, January 1 $960

Plan assets balance, January 1600

Service cost 150

Interest cost (10%) 96

Gain from change in actuarial assumption 44

Benefits paid (72)

Actual return on plan assets 40

Contributions 2016 120

Required -

1. Calculate the pension expense for 2016.

2. Make the journal entry to record pension expense, gains or losses, past service cost, funding, and payment of benefits for 2016.

Reference no: EM132612064

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