NAME SW-4F

SECTION DATE OF SUBMISSION

(1 whole) (Round off your final answers to two decimal places.)

DINA ENG Company reported a prepaid benefit cost of P1,500,000 on January

1, 2016. The entity provided the following information related to a defined plan
during the current year:

Current service cost 3,000,000

Actual return on plan assets 1,200,000
Interest cost 800,000
Settlement price of benefit obligation 500,000
paid in advance
Present value of benefit obligation paid 600,000
in advance
Interest income 1,000,000
Actuarial gain on PBO 400,000
Past service cost 500,000
Benefits paid to retirees 2,500,000
Contribution to the plan 4,000,000
Projected benefit obligation – Jan. 1 8,000,000
Fair value of plan assets – Jan. 1 10,000,000
Asset ceiling – January 1 1,500,000
Asset ceiling – December 31 2,000,000
Discount rate 10%

(1) What is the 2016 benefit expense?

(2) What is the fair value of the plan assets at December 31?
(3) What is the projected benefit obligation at December 31?
(4) What is the net remeasurement gain or loss in OCI?
DINO GUAN Company provided the following pension plan information for the
current year:

January 1 Projected benefit obligation 3,500,000

Accumulated benefit obligation 2,800,000
During the year Pension benefits paid to retired employees 250,000
December 31 Projected benefit obligation 4,200,000
Accumulated benefit obligation 3,100,000
Discount or settlement rate 10%

(5) What is the current service cost?

PBO – Jan 1 3,500,000

Current Service Cost (SQUEEZE) 600,000
Interest Expense (10% * 3.5m) 350,000
TOTAL 4,450,000
Benefits Paid to Employees ( 250,000)
PBO – Dec 31 4,200,000
PENNY RITO Company provided the following information during the current
year:
January 1 December 31
Fair value of plan assets 6,000,000 8,500,000
Projected benefit obligation 5,000,000 6,500,000
Prepaid/accrued benefit cost – surplus 1,000,000 2,000,000
Asset ceiling 700,000 1,200,000
Effect of asset ceiling 300,000 800,000

During the year, the entity recognized current service cost of P1,000,000, actual
return on plan assets of P400,000, and contribution to the plan of P2,100,000.
The discount rate is 10%.

(6) What is the employee benefit expense for the current year?
Current Service Cost 1,000,000
Interest Expense on PBO (5m*10%) 500,000
Interest Income on Plan Assets (6m*10%) ( 600,000)
Interest Expense on effect of asset ceiling (300,000*10%) 30,000
Employee Benefit Expense 930,000
(7) What is the net remeasurement loss for the current year?
Actual Return on Plan Assets 400,000
Interest Income on Plan Assets ( 600,000)
Remeasurement loss on plan assets ( 200,000)
Effect of asset ceiling – Dec 31 800,000
Effect of asset ceiling – Jan 1 ( 300,000)
Increase in effect of asset ceiling 500,000
Interest Expense on effect of asset ceiling ( 30,000)
Remeasurement Loss on asset ceiling 470,000

Remeasurement Loss on plan assets ( 200,000)

Remeasurement Loss on asset ceiling 470,000
Net Remeasurement Loss 270,000
(8) What is the defined benefit cost?
Employee Benefit Expense 930,000
Net Remeasurement Loss 270,000
Defined Benefit Cost 1,200,000

(9) What amount of prepaid benefit cost should be reported on December 31?
Defined Benefit Cost 1,200,000
Contribution to the Plan 2,100,000
Prepaid Benefit cost during the year 900,000
Asset Ceiling – Jan 1 700,000
Asset Ceiling – Dec 31 1,600,000
*The amount reported as prepaid benefit cost on dec. 31 is equal to the asset ceiling on the same date*

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