4) Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2021 are as follows: ($ millions) PBO balance, January 1 $ 480 Plan assets balance, January 1 350 Service cost 75 Interest cost 45 Gain from change in actuarial assumption 26 Benefits paid (36 ) Actual return on plan assets 23 Contributions 2021 65 The expected long-term rate of return on plan assets was 8%. There were no AOCI balances related to pensions on January 1, 2021, but at the end of 2021, the company amended the pension formula, creating a prior service cost of $13 million. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Required: 1. Calculate the pension expense for 2021. 2. Prepare the journal entries to record (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e) payment of benefits for 2021. 3. What amount will Electronic Distribution report in its 2021 balance sheet as a net pension asset or net pension liability?
4) Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2021 are as follows: ($ millions) PBO balance, January 1 $ 480 Plan assets balance, January 1 350 Service cost 75 Interest cost 45 Gain from change in actuarial assumption 26 Benefits paid (36 ) Actual return on plan assets 23 Contributions 2021 65 The expected long-term rate of return on plan assets was 8%. There were no AOCI balances related to pensions on January 1, 2021, but at the end of 2021, the company amended the pension formula, creating a prior service cost of $13 million. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Required: 1. Calculate the pension expense for 2021. 2. Prepare the journal entries to record (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e) payment of benefits for 2021. 3. What amount will Electronic Distribution report in its 2021 balance sheet as a net pension asset or net pension liability?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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4) Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2021 are as follows:
| ($ millions) | ||||
| PBO balance, January 1 | $ | 480 | ||
| Plan assets balance, January 1 | 350 | |||
| Service cost | 75 | |||
| Interest cost | 45 | |||
| Gain from change in actuarial assumption | 26 | |||
| Benefits paid | (36 | ) | ||
| Actual return on plan assets | 23 | |||
| Contributions 2021 | 65 | |||
The expected long-term
Required:
1. Calculate the pension expense for 2021.
2. Prepare the
3. What amount will Electronic Distribution report in its 2021
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