Reference no: EM133015038

Problem 1 - EMPLOYEE BENEFITS - The accountant of Dee Corp. provided you the following information for the year ended December 31, 2014:

Fair value of plan asset, January 1 - P8,500,000

Present value of benefit obligation, January 1 - 7,500,000

Asset ceiling, January - 1 400,000

Current service cost - 1,400,000

Past service cost during the year - 200,000

Unrecognized past service cost - 300,000

Actual return on plan asset - 840,000

Contribution to the plan - 1,200,000

Benefits paid to retirees at scheduled retirement - 1,500,000

Unrecognized actuarial loss - 200,000

Decrease in the present value of benefit obligation due to changes in actuarial assumptions 200,000

Present value of additional defined benefit, obligations settled 500,000

Settlement price of the additional defined benefit obligation 400,000

Asset ceiling, December 31 200,000

Discount rate 10%

REQUIREMENTS -

1. What is the employee benefit cost to be recoognized in P/L?

2. What is the employee benefit cost to be recognized in OCI?

3. What is the present value of the projected benefit obligation as of December 31?

4. What is the fair value of the plan assets as of December 31?

Problem 2 - Brad Company provided the following information for the current year:

Current service cost 520,000

Actual return on plan assets 810,000

Interest expense on PBO 590,000

Interest income on plan assets 350,000

Loss on plan settlement 240,000

Past service cost during the year 360,000

Contribution to the plan 1,500,000

Required -

1. What is the employee benefit expense for the current year?

2. What is the remeasurement gain or loss?

3. What is the total defined benefit cost?

4. What is the prepaid or accrued benefit cost for the year?