Reference no: EM133170812

Question - Alberta co. provides a defined benefit pension plan to its employees, and it accounts for using the immediate recognition approach under IFRS.

Dec 31, 2020, the plan reports:

Plan Assets $475,000

Defined benefit obligations $500,000

Jan 1, 2021, there is an amendment to the pension plan resulting in credit for previous years of service for some of Alberta employees. The credit is recognized and credited to the obligation on the same day of the amendment.

Other data relating to 2021:

2021

Past service cost $6,250

The current service cost $56,250

Contributions to the plan $105,625

Actual return on plan assets $40,000

Benefit paid to retirees $25,000

Discount and expected rate of return 10%

Required - Using the continuity schedules OR the worksheet to answer the following questions:

1. What is the projected defined benefit obligation (DBO) at Dec 31, 2021)?

2. What is the Plan asset fair value on Dec 31, 2021?

3. Calculate the 2021 pension expense.

4. Prepare the journal entries to record the pension expenses and the plan contributions.