Urban Life Ltd. sponsors a defined benefit pension plan for its employees. It is now the 20X9 fiscal year. An appropriate interest rate for long-term debt is 6%. Information with respect to the plan is as follows:
Fair value of plan assets, 31 December 2018 $ 5,478,000
Defined benefit obligation, 31 December 2018 6,659,000
Actual return on plan assets for 2019 62,700
Past service cost from amendment dated 31 December 2019,
liability is reduced because benefits were reduced (219,200 )
Actuarial revaluation dated 31 December 20]9; liability is
reduced because of changed mortality assumptions (619,700 )
Funding payment at year-end 2019 530,000
Benefits paid to retirees during 2019 121,000
Current service cost for 2019 258,400
Required:
1. Calculate the SFP net defined benefit pension liability as of 31 December 2018.
2. Calculate the net defined benefit pension liability as of 31 December 2019 by calculating the defined benefit obligation and the fair value of plan assets at 31 December 2019.
3. Analyze the three elements of pension accounting for 2019: service cost, net interest, and remeasurements. Prepare entries, and also an entry for the contribution to the fund during 2019. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)
4-a. Calculate the SFP net defined benefit pension liability as of 31 December 2019, reflecting requirement 1 and the entries in requirement 3.
