Practice Problem 4 (30 minutes) Sassy Home Inc. (SHI) is a home fashion retailer that...
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Practice Problem 4 (30 minutes) Sassy Home Inc. (SHI) is a home fashion retailer that prepares its financial statements in accordance with IFRS. It maintains a defined benefit plan for its employees. On January 1, 2020, the company improved the benefits for the plan, which increased the actuarial obligation by $600,000. SHI has a December 31 year end. Pertinent information with respect to its pension plan follows: 2020 2019 Liabilities actuarial value December 31 $6,450,000 $5,150,000 Assets market value December 31 5,475,000 4,600,000 Current service costs (CSC) (assume accrues 190,000 N/A evenly during the year) Plan contribution - January 1, 2020 300,000 N/A Benefits paid (no employees have yet retired) None N/A Discount rate used in actuarial assumptions 8% N/A Required: a) Reconcile the change in pension assets in 2020. b) Reconcile the change in pension liabilities in 2020. c) Calculate pension expense for the year ended December 31, 2020. d) Record the journal entries pertaining to the pension plan for the 2020 fiscal year
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