Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2021, Abbott and Abbott received the following information: Projected Benefit Obligation ($ in millions) Balance, January 1 $ 100 Service cost 29 Interest cost 10 Benefits paid (12 ) Balance, December 31 $ 127 Plan Assets Balance, January 1 $ 100 Actual return on plan assets 13 Contributions 2021 29 Benefits paid (12 ) Balance, December 31 $ 130 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, 2021. Required: 1. Determine Abbott and Abbott’s pension expense for 2021. 2. Prepare the journal entries to record Abbott and Abbott’s (a) pension expense, (b) funding, and (c) payment for 2021.
Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2021, Abbott and Abbott received the following information: Projected Benefit Obligation ($ in millions) Balance, January 1 $ 100 Service cost 29 Interest cost 10 Benefits paid (12 ) Balance, December 31 $ 127 Plan Assets Balance, January 1 $ 100 Actual return on plan assets 13 Contributions 2021 29 Benefits paid (12 ) Balance, December 31 $ 130 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, 2021. Required: 1. Determine Abbott and Abbott’s pension expense for 2021. 2. Prepare the journal entries to record Abbott and Abbott’s (a) pension expense, (b) funding, and (c) payment for 2021.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2021, Abbott and Abbott received the following information:
| Projected Benefit Obligation | ($ in millions) | ||||
| Balance, January 1 | $ | 100 | |||
| Service cost | 29 | ||||
| Interest cost | 10 | ||||
| Benefits paid | (12 | ) | |||
| Balance, December 31 | $ | 127 | |||
| Plan Assets | |||||
| Balance, January 1 | $ | 100 | |||
| Actual return on plan assets | 13 | ||||
| Contributions 2021 | 29 | ||||
| Benefits paid | (12 | ) | |||
| Balance, December 31 | $ | 130 | |||
The expected long-term
Required:
1. Determine Abbott and Abbott’s pension expense for 2021.
2. Prepare the
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