Reference no: EM132920153
Question - Sabriina Consultants Inc. has had a defined benefit pension plan since January 1, 2016.
The following represents beginning balances as at January 1, 2019:
Market value of Plan Asset $1,155,300; Defined Benefit Obligation $1,375,000; AOCI: Loss of $305,000
Additional Information is as follows:
Current Service cost is $196,000 for 2019 and $199,000 for 2020.
Company Funding/Contribution is $192,000 for 2019 and $205,000 for 2020.
Funding is made on December 31 of each year.
Actual return on assets is $49,600 for 2019 and $51,400 for 2020.
There is an increase in obligation for $28,000 due to changes in Actuarial assumptions at Dec 31, 2019.
There are payments made equal to $83,000 per year to retired employees in both 2019 and 2020 (payments to retirees are made at the end of the year on December 31).
Past service cost of $65,600 from plan amendment dated December 31, 2020: liability is increased because benefits were increased on a retroactive basis.
For 2019, the assumed interest rate is 4%. For 2020, the assumed interest rate is 5%.
Required -
1. Prepare a spreadsheet to determine all the pension items for both 2019 and 2020.
2. Prepare the required journal entries for both 2019 and 2020.
3. Prepare a partial balance sheet and a partial income statement for both 2019 and 2020.
4. Prepare the Pension Notes to the financial statements for 2019 only.
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