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: $8 million per year) Net loss-AOCI at January 1, 2024 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate ($ in millions) PBO Beginning of 2024 Service cost Interest cost, 7% Loss (gain) on PBO Less: Retiree benefits End of 2024 Plan Assets Beginning of 2024 $ 1,000 84 Return on plan assets, 8% (10% expected) 70 (18) Cash contributions (46) $ 1,090 Less: Retiree benefits End of 2024 $ 56 million $ 280 million 10 years 7% $ 800 64 94 (46) $ 912 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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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: $8 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 $56 million $280 million 10 vears 7% \table[[\table[[($ in millions)],[PBO]],,Plan Assets,],[Beginning of 2024,$1,000,Beginning of 2024,$800

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: $8 million per year)
Net loss-AOCI at January 1, 2024 (previous losses exceeded previous gains)
Average remaining service life of the active employee group
Actuary's discount rate
($ in millions)
PBO
Beginning of 2024
Service cost
Interest cost, 7%
Loss (gain) on PBO
Less: Retiree benefits
End of 2024
Plan Assets
Beginning of 2024
$ 1,000
84
Return on plan assets, 8% (10%
expected)
70
(18)
Cash contributions
(46)
$ 1,090
Less: Retiree benefits
End of 2024
$ 56 million
$ 280 million
10 years
7%
$ 800
64
94
(46)
$ 912
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.
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: $8 million per year) Net loss-AOCI at January 1, 2024 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate ($ in millions) PBO Beginning of 2024 Service cost Interest cost, 7% Loss (gain) on PBO Less: Retiree benefits End of 2024 Plan Assets Beginning of 2024 $ 1,000 84 Return on plan assets, 8% (10% expected) 70 (18) Cash contributions (46) $ 1,090 Less: Retiree benefits End of 2024 $ 56 million $ 280 million 10 years 7% $ 800 64 94 (46) $ 912 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.
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