Practice Problem 5 (20 minutes) Gidget Corp. has a defined benefit pension plan for its...
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Practice Problem 5 (20 minutes) Gidget Corp. has a defined benefit pension plan for its employees. It reports its financial results in accordance with IFRS. On January 1, 2020, the fair value of the plan assets was $3,300,000 and the DBO was $2,800,000. In 2020, Gidget improved the benefits payable under the pension plan. The plan's actuaries advised that the past service costs arising from this improvement were $450,000. Other information follows: Current service cost for 2020 was $325,000 (assume accrues at the end of the year). Gidget sent $350,000 cash to the pension trust on June 30, 2020. The pension trust paid out $225,000 in pension benefits with the payment made on December 31, 2020. The plan actuaries determined that the appropriate interest rate for 2020 was 5%. The actual return on plan assets for 2020 was $195,000. The actuaries revised the DBO as at December 31, 2020, due to changes in the expected inflation rate. The revised value was $3,490,000. Required: Calculate the expected ending DBO, and expected ending plan assets as at December 31, 2020, and calculate the pension expense for the year ended December 31, 2020 for Gidget's defined benefit pension plan
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