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Pension Plans

Aylmer has two pension plans for employees:

A. Defined Contribution Plan: For this plan, payments are made to the plan in January for the prior year. Aylmer contributes to this plan, on behalf of qualified employees. The employees do not contribute. A payment will be made in January 2021 for all of 2020 defined contribution pension related expenses. Remittances are only required to be made annually as is the corresponding accrual. The entry for accruing the pension expense for 2020 is to be made in December 2020.

In the Excel spreadsheet, see the tab labelled Defined Contribution Plan for calculations.

B. Defined Benefit Plan: For this plan, NOTE for 2020, the payment and expense have not been recorded on the trial balance.

In the Excel spreadsheet, see the tab labelled Defined Benefit Plan for calculations and requirements for reconciling the pension amounts (calculate/complete the worksheet).

TRIAL BALANCE 2019 2020

Pension Liability (Defined Contribution)		21,500		-
Net Defined Pension Asset/Liability (Defined Benefit)		4,260		4,260

Employees participating in the Defined-Contribution Plan: \begin{tabular}{|l|l|r|r|l|} \hline & \multicolumn{3}{|c|}{% of salary contributed } \\ \hline & & Annual Salaryon behalf of employees & Expense \\ \hline Brian Dennis & President & $136,500.00 & 5% & \\ \hline Jane Ferris & Controller & $95,600.00 & 4% & \\ \hline Lin Wang & Sales & $80,000.00 & 4% & \\ \hline Hannah Carter & Sales & $80,000.00 & 4% & \\ \hline Jessica Lampman & Supervisor & $62,400.00 & 4% & \\ \hline Larry Jones & Supervisor & $62,400.00 & 4% & \\ \hline Amy Fanshawe-Grac Accountant & $50,000.00 & 3% & \\ \hline & & & & \\ \hline & & & & \\ \hline \end{tabular} Note - employees do not contribute, there is no deduction from their pay cheques. For the defined benefit plan - assume the following: \begin{tabular}{|l|c|} \hline Past service cost (end of year adjustment) & 30,000 \\ \hline Fair Value of Plan assets, beg of year & 100,300 \\ \hline DBO, beginning of year & 104,560 \\ \hline Current Service cost & 10,000 \\ \hline Interest Rate on DBO and Plan Assets & 6% \\ \hline Actual Earnings on Plan Assets & 6,018 \\ \hline Employer Contribution for the year & 9,000 \\ \hline Benefits Paid to Retirees & 8,500 \\ \hline \end{tabular} Required: a) calculate the plan assets at the end of the year b) calculate the DBO at the end of the year c) calculate the funded status at the end of the year d) calculate the pension expense for the year. NOTE - prepare the pension worksheet for grading purposes

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