Reference no: EM132602437
The accountant for Serenity Ltd. has provided the following information for the company's defined benefit pension plan for 2021:
January 1, 2021 balances:
Pension Liability $240,000
Other Comprehensive Income - Remeasurement losses 99,600
Defined benefit obligation 900,000
Plan assets 660,000
Additional information:
Current service costs $120,000
Actual return on plan assets 21,000
Annual contribution to the plan 216,000
Benefits paid to retirees 14,400
Yield on high quality long-term corporate bonds 7%
Defined benefit obligation, December 31, 2021 (per actuary) $1,025,000
Required:
Assuming Serenity is a publicly traded firm reporting under IFRS, complete the following:
Question a. Calculate the pension expense, defined pension obligation, plan assets, and pension liability accounts at December 31, 2021.
Question b. Prepare the necessary journal entries related to the pension plan for 2021.
Question c. Prepare the partial balance sheet illustrating how the pension plan would be reported as at December 31, 2021.
Question d. Determine the funded status of the pension plan as at December 31, 2021.
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