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PROBLEM NO. 21 - Pension: Questions

The document provides information about Jomalig Company's defined benefit pension plan for the years ended December 31, 2010 and January 1, 2010. It includes the current service cost, benefits paid, contribution paid, present value of obligations, unrecognized gains, past service costs, and discount and expected return rates. Based on the information and audit results: 1) The amount to be recognized in the statement of financial position as of January 1, 2010 is P633.3 million. 2) The amount of actuarial gain to be recognized in profit or loss for the year ended December 31, 2010 is P5.76 million. 3) The net pension expense to be recognized in profit or loss for

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238 views2 pages

PROBLEM NO. 21 - Pension: Questions

The document provides information about Jomalig Company's defined benefit pension plan for the years ended December 31, 2010 and January 1, 2010. It includes the current service cost, benefits paid, contribution paid, present value of obligations, unrecognized gains, past service costs, and discount and expected return rates. Based on the information and audit results: 1) The amount to be recognized in the statement of financial position as of January 1, 2010 is P633.3 million. 2) The amount of actuarial gain to be recognized in profit or loss for the year ended December 31, 2010 is P5.76 million. 3) The net pension expense to be recognized in profit or loss for

Uploaded by

Mark Michael Legaspi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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PROBLEM NO.

21 – Pension
You gathered the following information related to Jomalig Company’s the defined benefit plan
for the year ended December 31,2010:
• Current service cost of providing benefits for the year to December 31,2010: P54 million
• Average remaining working life of employees: 10 years
• Benefits paid to retired employees in the year: P55.8 million
• Contribution paid to fund: P37.8 million
• Present value of obligation to provide benefits: P3,960 million at January 1,2010, and
P4,500 million at December 31,2010
• Net cumulative unrecognized gains at January 1, 2010: P453.6 million
• Past service cost: P207 million. All of these benefits have vested.
• Discount rates and expected rates of return on plan assets:
1/1/10 1/1/11
Discount rate 5% 6%
Expected rate of return on plan assets 7% 8%

QUESTIONS:
Based on the above and the result of your audit, answer the following:
1.The amount to be recognized in the statement of the financial position as of January 1, 2010 is
a. P633.3 million c. P957.6 million
b. P453.6 million d. P455.4 million
2.The amount of actuarial gain to be recognized in profit or loss for the year ended December
31,2010 is
a. P7.20 million c. P3.60 million
b. P5.76 million d. P 0
3.The net pension expense to be recognized in profit or loss for the year ended December
31,2010 is
a. P188.64 million c. P3.60 million
b. P183.60 million d. P270.00million

4.The unrecognized actuarial gain as of December 31,2010 is


a. P448.2 million c. P604.44 million
b. P453.6 million d. P 0
5.The amount to be recognized in the statement of financial position as of December 31,2010 is
a. P784.44 million c. P180.00 million
b. P682.20 million d. P455.40 million

Answers: 1)A; 2)B; 3)A; 4)C; 5)A

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