Exercise 17-10 (Algo) Determine pension expense Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2021, Abbott and Abbott received the following information: Projected Benefit Obligation Balance, January 1 Service cost ($ in millions) $125 22 Interest cost Benefits paid 15 (8) Balance, December 31 $154 Plan Assets Balance, January 1 Actual return on plan assets Contributions 2021 Benefits paid Balance, December 31 $75 10 22 (8) $99 The expected long-term rate of return on plan assets was 12%. There was no prior service cost and a negligible net loss-AOCI on January 1, 2021. Required: 1. Determine Abbott and Abbott's pension expense for 2021. 2 Prepare the journal entries to record Abbott and Abbott's (a) pension expense, (b) fundina, and (c) pavment for 2021. Problem 17-6 (Algo) Determine the PBO; plan assets; pension expense; two years Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2021. The provisions of the plan were not made retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of return. The actual return was also 10% in 2021 and 2022.* A consulting firm, engaged as actuary, recommends 5% as the appropriate discount rate. The service cost is $140,000 for 2021 and $220,000 for 2022. Year-end funding is $150,000 for 2021 and $160,000 for 2022. No assumptions or estimates were revised during 2021. * We assume the estimated return was based on the actual return on similar investments at the inception of the plan and that, since the estimate didn't change, that also was the actual rate in 2022. Required: Calculate each of the following amounts as of both December 31, 2021, and December 31, 2022: (Enter your answers in thousands (i.e., 200,000 should be entered as 200).)
Exercise 17-10 (Algo) Determine pension expense Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2021, Abbott and Abbott received the following information: Projected Benefit Obligation Balance, January 1 Service cost ($ in millions) $125 22 Interest cost Benefits paid 15 (8) Balance, December 31 $154 Plan Assets Balance, January 1 Actual return on plan assets Contributions 2021 Benefits paid Balance, December 31 $75 10 22 (8) $99 The expected long-term rate of return on plan assets was 12%. There was no prior service cost and a negligible net loss-AOCI on January 1, 2021. Required: 1. Determine Abbott and Abbott's pension expense for 2021. 2 Prepare the journal entries to record Abbott and Abbott's (a) pension expense, (b) fundina, and (c) pavment for 2021. Problem 17-6 (Algo) Determine the PBO; plan assets; pension expense; two years Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2021. The provisions of the plan were not made retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of return. The actual return was also 10% in 2021 and 2022.* A consulting firm, engaged as actuary, recommends 5% as the appropriate discount rate. The service cost is $140,000 for 2021 and $220,000 for 2022. Year-end funding is $150,000 for 2021 and $160,000 for 2022. No assumptions or estimates were revised during 2021. * We assume the estimated return was based on the actual return on similar investments at the inception of the plan and that, since the estimate didn't change, that also was the actual rate in 2022. Required: Calculate each of the following amounts as of both December 31, 2021, and December 31, 2022: (Enter your answers in thousands (i.e., 200,000 should be entered as 200).)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Exercise 17-10 (Algo) Determine pension expense
Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2021, Abbott and Abbott received the
following information:
Projected Benefit Obligation
Balance, January 1
Service cost
($ in millions)
$125
22
Interest cost
Benefits paid
15
(8)
Balance, December 31
$154
Plan Assets
Balance, January 1
Actual return on plan assets
Contributions 2021
Benefits paid
Balance, December 31
$75
10
22
(8)
$99
The expected long-term rate of return on plan assets was 12%. There was no prior service cost and a negligible net loss-AOCI on
January 1, 2021.
Required:
1. Determine Abbott and Abbott's pension expense for 2021.
2 Prepare the journal entries to record Abbott and Abbott's (a) pension expense, (b) fundina, and (c) pavment for 2021.
Transcribed Image Text:Problem 17-6 (Algo) Determine the PBO; plan assets; pension expense; two years
Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2021. The provisions of the plan were not made
retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of return. The
actual return was also 10% in 2021 and 2022.* A consulting firm, engaged as actuary, recommends 5% as the appropriate discount
rate. The service cost is $140,000 for 2021 and $220,000 for 2022. Year-end funding is $150,000 for 2021 and $160,000 for 2022. No
assumptions or estimates were revised during 2021.
* We assume the estimated return was based on the actual return on similar investments at the inception of the plan and that, since the
estimate didn't change, that also was the actual rate in 2022.
Required:
Calculate each of the following amounts as of both December 31, 2021, and December 31, 2022: (Enter your answers in thousands
(i.e., 200,000 should be entered as 200).)
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