Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2021 (the end of Beale's fiscal year), the following pension-related data were available: Projected Benefit Obligation ($ in millions) Balance, January 1, 2021 $ 780 Service cost 80 Interest cost, discount rate, 5% 39 Gain due to changes in actuarial assumptions in 2021 (23 ) Pension benefits paid (39 ) Balance, December 31, 2021 $ 837 Plan Assets ($ in millions) Balance, January 1, 2021 $ 820 Actual return on plan assets 49 (Expected return on plan assets, $54) Cash contributions 90 Pension benefits paid (39 ) Balance, December 31, 2021 $ 920 January 1, 2021, balances: ($ in millions) Pension asset $ 40 Prior service cost—AOCI (amortization $9 per year) 45 Net gain—AOCI (any amortization over 10 years) 142 Required: Prepare a pension spreadsheet to show the relationship among the PBO, plan assets, prior service cost, the net gain, pension expense, and the net pension asset. (Enter credit amounts with a minus sign and debit amounts with a positive sign. Enter your answers in millions.)

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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Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2021 (the end of Beale's fiscal year), the following pension-related data were available:

Projected Benefit Obligation	($ in millions)
Balance, January 1, 2021		$	780
Service cost			80
Interest cost, discount rate, 5%			39
Gain due to changes in actuarial assumptions in 2021			(23	)
Pension benefits paid			(39	)
Balance, December 31, 2021		$	837

Plan Assets	($ in millions)
Balance, January 1, 2021		$	820
Actual return on plan assets			49
(Expected return on plan assets, $54)
Cash contributions			90
Pension benefits paid			(39	)
Balance, December 31, 2021		$	920

January 1, 2021, balances:	($ in millions)
Pension asset	$	40
Prior service cost—AOCI (amortization $9 per year)		45
Net gain—AOCI (any amortization over 10 years)		142

Required:
Prepare a pension spreadsheet to show the relationship among the PBO, plan assets, prior service cost, the net gain, pension expense, and the net pension asset. (Enter credit amounts with a minus sign and debit amounts with a positive sign. Enter your answers in millions.)

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