Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2016, Abbott and Abbott received the following information: Projected Benefit Obligation (S in millions) Balance, January 1 $120 Service cost 20 Interest cost 12 Benefits paid (9) Balance, December 31 $143 Plan Assets $ 80 Balance, January 1 Actual return on plan assets Contributions 2016 20 Benefits paid (9) Balance, December 31 $100 The expected long-term rate of return on plan assets was 10%. There was no prior service cost and a negligible net loss-AOCI on January 1, 2016. Required: 1. Determine Abbott and Abbott's pension expense for 2016. 2. Prepare the journal entries to record Abbott and Abbott's pension expense, funding, and payment for 2016.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2016, Abbott and Abbott
received the following information:
Projected Benefit Obligation
(S in millions)
Balance, January 1
$120
Service cost
20
Interest cost
12
Benefits paid
(9)
Balance, December 31
$143
Plan Assets
$ 80
Balance, January 1
Actual return on plan assets
Contributions 2016
20
Benefits paid
(9)
Balance, December 31
$100
The expected long-term rate of return on plan assets was 10%. There was no prior service cost and a negligible net
loss-AOCI on January 1, 2016.
Required:
1. Determine Abbott and Abbott's pension expense for 2016.
2. Prepare the journal entries to record Abbott and Abbott's pension expense, funding, and payment for 2016.
Transcribed Image Text:Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2016, Abbott and Abbott received the following information: Projected Benefit Obligation (S in millions) Balance, January 1 $120 Service cost 20 Interest cost 12 Benefits paid (9) Balance, December 31 $143 Plan Assets $ 80 Balance, January 1 Actual return on plan assets Contributions 2016 20 Benefits paid (9) Balance, December 31 $100 The expected long-term rate of return on plan assets was 10%. There was no prior service cost and a negligible net loss-AOCI on January 1, 2016. Required: 1. Determine Abbott and Abbott's pension expense for 2016. 2. Prepare the journal entries to record Abbott and Abbott's pension expense, funding, and payment for 2016.
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