At the beginning of current year, De Guzman Company reported the following information in relation to a defined benefit plan: Fair value of plan assets - 7,000,000 Projected benefit obligation - 7,500,000 During the current year, the entity determined that the current service cost was 1,400,000 and the discount rate is 10%. The actual return on plan assets during the year was 840,000. Other related information for the current year: Contribution to the plan - 1,200,000 Benefits paid to retirees - 1,500,000 Decrease in projected benefit obligation due to changes in actuarial assumptions - 200,000 Present value of defined benefit obligation settled - 500,000 Settlement price of defined benefit obligation- 400,000 1. What amount should be reported in the income statement for the current year as employee benefit expense? 2. What is the net amount of remeasurements on Dec 31? 3. What is the fair value of plan assets kn Dec 31? 4. What is the projected benefit obligation on Dec 31? 5. What is the balance of the prepaid/accrued benefit cost on Dec 31?
At the beginning of current year, De Guzman Company reported the following information in relation to a defined benefit plan: Fair value of plan assets - 7,000,000 Projected benefit obligation - 7,500,000 During the current year, the entity determined that the current service cost was 1,400,000 and the discount rate is 10%. The actual return on plan assets during the year was 840,000. Other related information for the current year: Contribution to the plan - 1,200,000 Benefits paid to retirees - 1,500,000 Decrease in projected benefit obligation due to changes in actuarial assumptions - 200,000 Present value of defined benefit obligation settled - 500,000 Settlement price of defined benefit obligation- 400,000 1. What amount should be reported in the income statement for the current year as employee benefit expense? 2. What is the net amount of remeasurements on Dec 31? 3. What is the fair value of plan assets kn Dec 31? 4. What is the projected benefit obligation on Dec 31? 5. What is the balance of the prepaid/accrued benefit cost on Dec 31?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
At the beginning of current year, De Guzman Company reported the following information in relation to a defined benefit plan:
Fair value of plan assets - 7,000,000
Projected benefit obligation - 7,500,000
During the current year, the entity determined that the current service cost was 1,400,000 and the discount rate is 10%.
The actual return on plan assets during the year was 840,000.
Other related information for the current year:
Contribution to the plan - 1,200,000
Benefits paid to retirees - 1,500,000
Decrease in projected benefit obligation due to changes in actuarial assumptions - 200,000
Present value of defined benefit obligation settled - 500,000
Settlement price of defined benefit obligation- 400,000
1. What amount should be reported in the income statement for the current year as employee benefit expense?
2. What is the net amount of remeasurements on Dec 31?
3. What is the fair value of plan assets kn Dec 31?
4. What is the projected benefit obligation on Dec 31?
5. What is the balance of the prepaid/accrued benefit cost on Dec 31?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step 1: Introduction of defined benefit pension plan
VIEWStep 2: Requirement 1 - Computation of the amount reported as employee benefit expense
VIEWStep 3: Requirement 2 - Computation of the net amount of remeasurements on Dec 31
VIEWStep 4: Requirement 3 - Computation of the fair value of plan assets on Dec 31
VIEWSolution
VIEW
Step by step
Solved in 5 steps with 6 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education