Actuary and trustee reports indicate the following changes in the PBO and plan assets of Mahomes Industries during 2024: Prior service cost at January 1, 2824, from plan amendment at the beginning of 2821 (amortization: $21 million per year) Net loss-AOCI at January 1, 2824 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate ($ in millions) PBO Beginning of 2024 Service cost Interest cost, 7% Loss (gain) on PBO Less: Retiree benefits. End of 2824 $ 2,300 97 161 (31) (72) $ 2,455 Plan Assets Beginning of 2824 Return on plan assets, 8% (10% expected) Cash contributions Less: Retiree benefits End of 2824 $ 147 million $ 938 million 10 years $ 2,100 168 187 (72) $ 2,303 Required: 1-a. Determine Mahomes's pension expense for 2024. 1-b, 2. to 4. Prepare the appropriate journal entries to record the pension expense, to record any 2024 gains and losses, to record the cash contribution to plan assets and to record retiree benefits.
Actuary and trustee reports indicate the following changes in the PBO and plan assets of Mahomes Industries during 2024: Prior service cost at January 1, 2824, from plan amendment at the beginning of 2821 (amortization: $21 million per year) Net loss-AOCI at January 1, 2824 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate ($ in millions) PBO Beginning of 2024 Service cost Interest cost, 7% Loss (gain) on PBO Less: Retiree benefits. End of 2824 $ 2,300 97 161 (31) (72) $ 2,455 Plan Assets Beginning of 2824 Return on plan assets, 8% (10% expected) Cash contributions Less: Retiree benefits End of 2824 $ 147 million $ 938 million 10 years $ 2,100 168 187 (72) $ 2,303 Required: 1-a. Determine Mahomes's pension expense for 2024. 1-b, 2. to 4. Prepare the appropriate journal entries to record the pension expense, to record any 2024 gains and losses, to record the cash contribution to plan assets and to record retiree benefits.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Actuary and trustee reports indicate the following changes in the PBO and plan assets of Mahomes Industries during 2024:
Prior service cost at January 1, 2024, from plan amendment at the beginning of 2021
(amortization: $21 million per year)
Net loss-AOCI at January 1, 2024 (previous losses exceeded previous gains)
Average remaining service life of the active employee group
Actuary's discount rate
($ in millions)
PBO
Beginning of 2024
Service cost
Interest cost, 7%
Loss (gain) on PBO
Less: Retiree benefits
End of 2924
Req 1A
Req 18 and 2
to 4
$ 2,300
97
161
(31)
(72)
$ 2,455
Complete this question by entering your answers in the tabs below.
Pension expense
Pension Expense
Required:
1-a. Determine Mahomes's pension expense for 2024.
1-b, 2. to 4. Prepare the appropriate journal entries to record the pension expense, to record any 2024 gains and losses, to record the
cash contribution to plan assets and to record retiree benefits.
$
Plan Assets
Beginning of 2024
Return on plan assets, 8% (10%
expected)
< Req 1A
Cash contributions
Less: Retiree benefits
End of 2024
0
Determine Mahomes's pension expense for 2024.
Note: 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).
$ 147 million
$930 million
10 years
7%
$ 2,100
168
Req 1B and 2 to 4 >
187
(72)
$ 2,303
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