Actuary and trustee reports indicate the following changes in the PBO and plan assets of Lakeside Cable during 2021: Prior service cost at Jan. 1, 2021, from plan amendment at the beginning of 2019 (amortization: $5 million per year) Net loss-pensions at Jan.1, 2021 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate ($ in millions) Beginning of 2021 Service cost Interest cost, 9% Loss (gain) on PBO Less: Retiree benefits End of 2021 PBO $200 90 18 (2) (6) Less: Retiree benefits $300 End of 2021 Beginning of 2022 Service cost Interest cost, 9% Loss (gain) on PBO Less: Retiree benefits End of 2022 PBO $300 41 27 4 (19) Beginning of 2021 Return on plan assets, 8.0 % (10 % expected) Cash contributions $353 Plan Assets $150 Beginning of 2022 Return on plan assets, 15 % (10 % expected) Cash contributions Less: Retiree benefits End of 2022 12 44 (6) Assume the following actuary and trustee reports indicating changes in the PBO and plan assets of Lakeside Cable during 2022: ($ in millions) $200 Plan Assets $200 30 33 (19) $35 million $50 million $244 10 years 9%

Actuary and trustee reports indicate the following changes in the PBO and plan assets of Lakeside Cable during 2021: Prior service cost at Jan. 1, 2021, from plan amendment at the beginning of 2019 (amortization: $5 million per year) Net loss-pensions at Jan.1, 2021 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate ($ in millions) Beginning of 2021 Service cost Interest cost, 9% Loss (gain) on PBO Less: Retiree benefits End of 2021 PBO $200 90 18 (2) (6) Less: Retiree benefits $300 End of 2021 Beginning of 2022 Service cost Interest cost, 9% Loss (gain) on PBO Less: Retiree benefits End of 2022 PBO $300 41 27 4 (19) Beginning of 2021 Return on plan assets, 8.0 % (10 % expected) Cash contributions $353 Plan Assets $150 Beginning of 2022 Return on plan assets, 15 % (10 % expected) Cash contributions Less: Retiree benefits End of 2022 12 44 (6) Assume the following actuary and trustee reports indicating changes in the PBO and plan assets of Lakeside Cable during 2022: ($ in millions) $200 Plan Assets $200 30 33 (19) $35 million $50 million $244 10 years 9%

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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Question

Determine the new gains and/or losses in 2022, and prepare the appropriate journal entry(s) to record them.

1. Journal entry to record losses.

2. Journal entry to record gains.

Required information
[The following information applies to the questions displayed below.]
Actuary and trustee reports indicate the following changes in the PBO and plan assets of Lakeside Cable during 2021:
Prior service cost at Jan. 1, 2021, from plan amendment at the
beginning of 2019 (amortization: $5 million per year)
Net loss-pensions at Jan.1, 2021 (previous losses exceeded previous gains)
Average remaining service life of the active employee group
Actuary's discount rate
($ in millions)
Beginning of 2021
Service cost
Interest cost, 9%
Loss (gain) on PBO
Less: Retiree benefits
End of 2021
Beginning of 2022
Service cost
PBO
$200
90
18
(2)
(6) Less: Retiree benefits
$300
End of 2021
Interest cost, 9%
Loss (gain) on PBO
Less: Retiree benefits
End of 2022
PBO
$300
41
27
4
(19)
Beginning of 2021
Return on plan assets,
8.0 % (10 % expected)
Cash contributions
$353
Assume the following actuary and trustee reports indicating changes in the PBO and plan assets of Lakeside Cable during
2022:
($ in millions)
Plan
Assets
$150
Beginning of 2022
Return on plan assets,
15% (10 % expected)
Cash contributions
Less: Retiree benefits
End of 2022
12
44
(6)
$200
Plan
Assets
$200
30
33
(19)
$35 million
$50 million
10 years
9%
$244

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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