How much is the Defined Benefit Liability/Asset at December 31, 2021?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter19: Accounting For Post Retirement Benefits
Section: Chapter Questions
Problem 6RE
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Question
The following data pertains to Integrity Company that adopts a defined benefit plan for its employees:
⚫ Defined benefit obligation, January 1, 2021 - P4,800,000
• Plan assets at fair value, January 1, 2021 - P6,250,000
For the year 2021:
⚫ Current service cost - P560,000
• Contributions made to the fund - P750,000
• Benefits paid to employees - P1,350,000
• Discount rate - 10%
• Defined benefit obligation after remeasurement on December 31, 2021 P4,550,000
• Actuarial loss on plan assets - P31,000
How much is the Defined Benefit Liability/Asset at December 31, 2021?
Choices:
1,206,000 Liability
1,206,000 Assets
1,694,000 Liability
1,694,000 Asset
Show your computation
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