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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 $5 million per year. At the end of 2024, the pension formula was amended again, creating an additional prior service cost of $40 million. The expected rate of return on assets and the actuary's discount rate were 10%, and the average remaining service life of the active employee group is 10 years. Required: 1. Fill in the missing amounts. 2. Prepare the 2024 journal entry to record pension expense. 3. Prepare the journal entry(s) to record any 2024 gains and losses and new prior service cost in 2024. 4. Prepare the 2024 journal entries to record (a) the cash contribution to plan assets and (b) the payment of retiree benefits. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 4 Fill in the missing amounts. Note: Enter credit amounts with a minus sign and debit amounts with a positive sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). ($ in millions) PBO Plan Assets Prior Service Cost-AOCI Net Loss- AOCI Pension Expense Cash Net Pension (Liability) or Asset Balance, January 1, 2024 (830) 680 20 93 (150) Service cost 74 Interest cost Expected return on assets Adjust for: Loss on assets Amortization of: Prior service cost Net loss Loss on PBO Prior service cost (7) Cash funding Retiree benefits Balance, December 31, 2024 (830) 775 Req 1 20 93 Req 2 to 4 > (13) 84 74 (79)

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 $5 million per year. At the end of 2024, the pension formula was amended again, creating an additional prior service cost of $40 million. The expected rate of return on assets and the actuary's discount rate were 10%, and the average remaining service life of the active employee group is 10 years. Required: 1. Fill in the missing amounts. 2. Prepare the 2024 journal entry to record pension expense. 3. Prepare the journal entry(s) to record any 2024 gains and losses and new prior service cost in 2024. 4. Prepare the 2024 journal entries to record (a) the cash contribution to plan assets and (b) the payment of retiree benefits. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 4 Fill in the missing amounts. Note: Enter credit amounts with a minus sign and debit amounts with a positive sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). ($ in millions) PBO Plan Assets Prior Service Cost-AOCI Net Loss- AOCI Pension Expense Cash Net Pension (Liability) or Asset Balance, January 1, 2024 (830) 680 20 93 (150) Service cost 74 Interest cost Expected return on assets Adjust for: Loss on assets Amortization of: Prior service cost Net loss Loss on PBO Prior service cost (7) Cash funding Retiree benefits Balance, December 31, 2024 (830) 775 Req 1 20 93 Req 2 to 4 > (13) 84 74 (79)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $5 million per year. At the end of 2024, the pension formula was amended again, creating an additional prior service cost of $40 million. The expected rate of return on assets and the actuary's discount rate were 10%, and the average remaining service life of the active employee group is 10 years. Required: 1. Fill in the missing amounts. 2. Prepare the 2024 journal entry to record pension expense. 3. Prepare the journal entry(s) to record any 2024 gains and losses and new prior service cost in 2024. 4. Prepare the 2024 journal entries to record (a) the cash contribution to plan assets and (b) the payment of retiree benefits. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 4 Fill in the missing amounts. Note: Enter credit amounts with a minus sign and debit amounts with a positive sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Prior ($ in millions) PBO Plan Assets Service Cost-AOCI Net Loss- AOCI Pension Expense Cash Net Pension (Liability) or Asset Balance, January 1, 2024 (830) 680 20 93 (150) Service cost 74 Interest cost Expected return on assets Adjust for: Loss on assets Amortization of: Prior service cost Net loss Loss on PBO Prior service cost (7) Cash funding Retiree benefits Balance, December 31, 2024 (830) 775 < Req 1 20 93 Req 2 to 4 > (13) 84 74 (79)
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 $5 million per year. At the end of 2024, the pension formula was amended again, creating an additional prior service cost of $40 million. The expected rate of return on assets and the actuary's discount rate were 10%, and the average remaining service life of the active employee group is 10 years. Required: 1. Fill in the missing amounts. 2. Prepare the 2024 journal entry to record pension expense. 3. Prepare the journal entry(s) to record any 2024 gains and losses and new prior service cost in 2024. 4. Prepare the 2024 journal entries to record (a) the cash contribution to plan assets and (b) the payment of retiree benefits. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 4 Fill in the missing amounts. Note: Enter credit amounts with a minus sign and debit amounts with a positive sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Prior ($ in millions) PBO Plan Assets Service Cost-AOCI Net Loss- AOCI Pension Expense Cash Net Pension (Liability) or Asset Balance, January 1, 2024 (830) 680 20 93 (150) Service cost 74 Interest cost Expected return on assets Adjust for: Loss on assets Amortization of: Prior service cost Net loss Loss on PBO Prior service cost (7) Cash funding Retiree benefits Balance, December 31, 2024 (830) 775 < Req 1 20 93 Req 2 to 4 > (13) 84 74 (79)
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