Question - On January 1, 2017, ABC Ltd reported the following balances relating to their defined benefit pension plan: Accrued benefit obligation $3,200,000 Fair value of plan assets 3,200,000 Other data related to the pension plan for 2017 are: Service costs 140,000 Unrecognized past service costs -0- Contributions to the plan 204,000 Benefits paid 200,000 Actual return on plan assets 192,000 Interest on the liability 9% Expected rate of return 6% The company follows IFRS and has a December 31 year-end.
Required:
(a) Calculate the accrued benefit obligation at December 31, 2017. There are no actuarial gains or losses or past service costs.
(b) Calculate the fair value of plan assets at December 31, 2017.
(c) Calculate pension expense for 2017.
(d) Prepare the journal entries to record the pension expense and the contributions for 2017.