Suggested languages for you:

Q20-10IFRS

Expert-verified
Found in: Page 1192

### Intermediate Accounting (Kieso)

Book edition 16th
Author(s) Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Pages 1552 pages
ISBN 9781118743201

# Linda Berstler Company sponsors a defined benefit pension plan. The corporation’s actuary provides the following information about the plan. January 1, 2017 December 31, 2017Defined benefit obligations $2,500$3,300Plan assets (fair value) 1,700 2,620Discount rate 10%Pension asset/liability 800 ?Service cost for the year 2017 400Contributions (funding in 2017) 700Benefits paid in 2017 200Instructions (a) Compute the actual return on the plan assets in 2017. (b) Compute the amount of other comprehensive income (G/L) as of December 31, 2017. (Assume the January 1, 2017, balance was zero.)

The actual return on the plan assets is $420. The net pension liability loss for the company is$100.

See the step by step solution

## Step-by-Step SolutionStep 1: Definition of Pension Plan

A pension plan refers to a scheme in which an employer promises a specified payment to its employees in the form of regular payments or a lump-sum at the time of their retirement.

## Step 2: Computation of actual return on plan assets

 Particulars Amounts ($) Closing balance of plan assets 2,620 Less: Fund available after benefit paid (Working note) (2,200) Actual return on plan assets$420

Working note:

Computation of fund available after benefit paid: