Actuary and trustee reports indicate the following changes in the PBO and plan assets of Douglas-Roberts industries during 2021: Prior service cost at Jan. 1, 2021, from plan amendment at the Beginning of 2018 (amortization: $6 million per year) $ 42 million Net loss—AOCI at Jan.1, 2021 (previous losses exceeded previous gains) $130 million Average remaining service life of the active employee group 10 years Actuary’s discount rate 7% ($ in millions) Plan PRO Assets Beginning of 2021 $ 700 Beginning of 2021 $500 Service cost 48 Return on plan assets, 8% (10% expected) 40 Interest cost, 7% 49 Loss (gain) on PBO (8) Cash contributions 95 Less: Retiree benefits (29) Less: Retiree benefits (29) End of 2021 $760 End of 2021 $606 Required 1-a Determine Douglas-Roberts’s pension expense for 2021. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Pension Expense _________________________________________ _________ _________________________________________ _________ _________________________________________ _________ _________________________________________ _________ _________________________________________ __________ _________________________________________ __________ Pension expense $ 0 Required 1-b, 2 to 4 Prepare the appropriate journal entries to record the pension expense, to record any 2021 gains and losses, to record the cash contribution to plan assets and to record retiree benefits. (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 100.) Journal entry worksheet Record annual pension expense. Record the change in plan assets. Record the change in the PBO. Record the cash contribution to plan assets. Record the retiree benefits paid.
Actuary and trustee reports indicate the following changes in the PBO and plan assets of Douglas-Roberts industries during 2021:
Prior service cost at Jan. 1, 2021, from plan amendment at the
Beginning of 2018 (amortization: $6 million per year) $ 42 million
Net loss—AOCI at Jan.1, 2021 (previous losses exceeded previous gains) $130 million
Average remaining service life of the active employee group 10 years
Actuary’s discount rate 7%
($ in millions) Plan
PRO Assets
Beginning of 2021 $ 700 Beginning of 2021 $500
Service cost 48 Return on plan assets,
8% (10% expected) 40
Interest cost, 7% 49
Loss (gain) on PBO (8) Cash contributions 95
Less: Retiree benefits (29) Less: Retiree benefits (29)
End of 2021 $760 End of 2021 $606
Required 1-a
Determine Douglas-Roberts’s pension expense for 2021. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)
Pension Expense
_________________________________________ _________
_________________________________________ _________
_________________________________________ _________
_________________________________________ _________
_________________________________________ __________
_________________________________________ __________
Pension expense $ 0
Required 1-b, 2 to 4
Prepare the appropriate journal entries to record the pension expense, to record any 2021 gains and losses, to record the cash contribution to plan assets and to record retiree benefits. (If no entry is required for a transaction/event, select “No
Journal entry worksheet
- Record annual pension expense.
- Record the change in plan assets.
- Record the change in the PBO.
- Record the cash contribution to plan assets.
- Record the retiree benefits paid.
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