A partially completed pension spreadsheet showing the relationships among the elements that constitute Carney, Incorporated's defined benefit pension plan follows. Six years earlier, Carney revised its pension formula and recalculated benefits earned by employees in prior years using the more generous formula. The prior service cost created by the recalculation is being amortized at the rate of $6 million per year. At the end of 2024, the pension formula was amended again, creating an additional prior service cost of $40 million. The expected rate of return on assets and the actuary's discount rate were 10 %, and the average remaining service life of the active employee group is 10 years. Required: 1. Fill in the missing amounts. 2. Prepare the 2024 journal entry to record pension expense. 3. Prepare the journal entry(s) to record any 2024 gains and losses and new prior service cost in 2024. 4. Prepare the 2024 journal entries to record (a) the cash contribution to plan assets and (b) the payment of retiree benefits. Required 1: Fill in the missing amounts. Required 2-4:2. Prepare the 2024 journal entry to record pension expense. 3. Prepare the journal entry(s) to record any 2024 gains and losses and new prior service cost in 2024. 4. Prepare the 2024 journal entries to record (a) the cash contribution to plan assets and (b) the payment of retiree benefits. Note: If no entry is required for a transaction/event, select "No journal entry required in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10)
A partially completed pension spreadsheet showing the relationships among the elements that constitute Carney, Incorporated's defined benefit pension plan follows. Six years earlier, Carney revised its pension formula and recalculated benefits earned by employees in prior years using the more generous formula. The prior service cost created by the recalculation is being amortized at the rate of $6 million per year. At the end of 2024, the pension formula was amended again, creating an additional prior service cost of $40 million. The expected rate of return on assets and the actuary's discount rate were 10 %, and the average remaining service life of the active employee group is 10 years. Required: 1. Fill in the missing amounts. 2. Prepare the 2024 journal entry to record pension expense. 3. Prepare the journal entry(s) to record any 2024 gains and losses and new prior service cost in 2024. 4. Prepare the 2024 journal entries to record (a) the cash contribution to plan assets and (b) the payment of retiree benefits. Required 1: Fill in the missing amounts. Required 2-4:2. Prepare the 2024 journal entry to record pension expense. 3. Prepare the journal entry(s) to record any 2024 gains and losses and new prior service cost in 2024. 4. Prepare the 2024 journal entries to record (a) the cash contribution to plan assets and (b) the payment of retiree benefits. Note: If no entry is required for a transaction/event, select "No journal entry required in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Ashvin
Transcribed Image Text:A partially completed pension spreadsheet showing the relationships among the elements that constitute Carney, Incorporated's defined benefit pension plan follows. Six years earlier, Carney revised its pension formula and recalculated
benefits earned by employees in prior years using the more generous formula. The prior service cost created by the recalculation is being amortized at the rate of $6 million per year. At the end of 2024, the pension formula was
amended again, creating an additional prior service cost of $40 million. The expected rate of return on assets and the actuary's discount rate were 10 %, and the average remaining service life of the active employee group is 10 years.
Required: 1. Fill in the missing amounts. 2. Prepare the 2024 journal entry to record pension expense. 3. Prepare the journal entry(s) to record any 2024 gains and losses and new prior service cost in 2024. 4. Prepare the 2024 journal
entries to record (a) the cash contribution to plan assets and (b) the payment of retiree benefits. Required 1: Fill in the missing amounts. Required 2-4: 2. Prepare the 2024 journal entry to record pension expense. 3. Prepare the
journal entry(s) to record any 2024 gains and losses and new prior service cost in 2024. 4. Prepare the 2024 journal entries to record (a) the cash contribution to plan assets and (b) the payment of retiree benefits. Note: If no entry is
required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10)
Transcribed Image Text:($ in millions)
Balance, January 1, 2024
Service cost
Interest cost
Expected return on assets
Adjust for:
Loss on assets
Amortization of:
Prior service cost
Net loss
Loss on PBO
Prior service cost
Cash funding
Retiree benefits
Balance, December 31, 2024
PBO
(970)
(970)
Plan Assets
870
(6)
805
Prior
Service
Cost-AOCI
25
25
Net Loss-
AOCI
107
107
Pension
Expense
98
98
Cash
Net Pension
(Liability) or
Asset
(100)
(27)
92
(35)
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