Question query ltd has a post-retirement health care plan, Ask an Expert

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Question: Query Ltd. has a post-retirement health care plan, which it accounts for under IFRS. Selected plan details for 2014 follow:

January 1 December 31

Defined post-retirement benefit obligation 2,071,000 ?

Fair value of plan assets 1,610,000 ?

Actuarial loss due to change in actuarial assumptions 43,000

Current service cost for year 112,000

Discount rate and expected rate of return on plan assets 8%

Contributions to the plan 95,000

Actual return on plan assets earned during the year 103,000

Health benefits paid on behalf of retirees during the year 119,000

Assume all cash inflows and outflows to the plan occur on December 31, 2014.

Required: 1. Calculate the 2014 post-retirement benefit expense and complete a worksheet.

2. Prepare the 2014 journal entries required on the books of Query Ltd. to record the relevant post-retirement benefit transactions.

3. Provide the December 31, 2014 balance sheet presentation of the post-retirement benefit plan data for Query Ltd.

4. Is the plan over- or underfunded on December 31, 2014? Provide calculations to support your conclusion.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92569965

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