Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2024 are as follow ($ millions) PBO balance, January 1 Plan assets balance, January 1 Service cost Interest cost Gain from change in actuarial assumption Benefits paid Actual return on plan assets Contributions 2024 $480 350 75 45 26 (36) 23 65 The expected long-term rate of return on plan assets was 8%. There were no AOCI balances related to pensions but at the end of 2024, the company amended the pension formula, creating a prior service cost of $13 million. Required: 1. Calculate the pension expense for 2024. 2. Prepare the journal entries to record (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, benefits for 2024. 3. What amount will Electronic Distribution report in its 2024 balance sheet as a net pension asset or net pension

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2024 are as follow
($ millions)
PBO balance, January 1
Plan assets balance, January 1
Service cost
Interest cost
Gain from change in actuarial assumption
Benefits paid
Actual return on plan assets
Contributions 2024
$480
350
75
45
26
(36)
23
65
The expected long-term rate of return on plan assets was 8%. There were no AOCI balances related to pensions
but at the end of 2024, the company amended the pension formula, creating a prior service cost of $13 million.
Required:
1. Calculate the pension expense for 2024.
2. Prepare the journal entries to record (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding,
benefits for 2024.
3. What amount will Electronic Distribution report in its 2024 balance sheet as a net pension asset or net pension
Transcribed Image Text:Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2024 are as follow ($ millions) PBO balance, January 1 Plan assets balance, January 1 Service cost Interest cost Gain from change in actuarial assumption Benefits paid Actual return on plan assets Contributions 2024 $480 350 75 45 26 (36) 23 65 The expected long-term rate of return on plan assets was 8%. There were no AOCI balances related to pensions but at the end of 2024, the company amended the pension formula, creating a prior service cost of $13 million. Required: 1. Calculate the pension expense for 2024. 2. Prepare the journal entries to record (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, benefits for 2024. 3. What amount will Electronic Distribution report in its 2024 balance sheet as a net pension asset or net pension
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