19-Solutions to Suggested P19-11 - PROBLEM 19-11(a The...

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PROBLEM 19-11 (a) The pension work sheet for Beaton and Gunter Inc. for the year ended December 31, 2011 is presented on the following page. It is assumed that the company is following IFRS because it is a subsidiary of a multinational company that is likely a public company. (b) The journal entries required to reflect the accounting for Beaton and Gunter Inc.’s pension plan for the year ended December 31, 2011, are as follows: Pension Expense ............................................. 415,843 Accrued Pension Asset/Liability ............. 415,843 Accrued Pension Asset/Liability* ................... 493,750 Employee Pension Contributions Payable* ... 81,250 Cash .......................................................... 575,000 * When the payroll deductions were made, the company paid out a lower amount of cash to the employees as it withheld the amounts for the employee contributions to the pension plan. It is assumed that the payroll entry, therefore, resulted in a previous net debit to Cash of $81,250 and a credit to Employee Pension Contributions Payable of $81,250. (c) Pension Reconciliation Schedule—2011 Accrued benefit obligation $(12,243,750) Plan assets at fair value 10,006,250
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