Hicks Cable Company has a defined benefit pension plan. Three alternative possibilities for pension-related data at January 1, 2024 are shown below: Case 1 Net loss (gain)-AOCI, January 1 $ 340 ($ in thousands) Case 2 $ (410) Case 3 281 2024 loss (gain) on plan assets (31) (28) 6 2024 loss (gain) on PBO (43) 36 Accumulated benefit obligation, January 1 Projected benefit obligation, January 1 (3,150) (2,750) (3,510) (2,870) 3,000 2,900 (290) (1,650) (1,900) 1,750 10 12 7 Fair value of plan assets, January 1 Average remaining service period of active employees (years) Required: 1. For each independent case, calculate any amortization of the net loss or gain that should be included as a component of pension expense for 2024. 2. For each independent case, determine the net loss-AOCI or net gain-AOCI as of January 1, 2025.

Hicks Cable Company has a defined benefit pension plan. Three alternative possibilities for pension-related data at January 1, 2024 are shown below: Case 1 Net loss (gain)-AOCI, January 1 $ 340 ($ in thousands) Case 2 $ (410) Case 3 281 2024 loss (gain) on plan assets (31) (28) 6 2024 loss (gain) on PBO (43) 36 Accumulated benefit obligation, January 1 Projected benefit obligation, January 1 (3,150) (2,750) (3,510) (2,870) 3,000 2,900 (290) (1,650) (1,900) 1,750 10 12 7 Fair value of plan assets, January 1 Average remaining service period of active employees (years) Required: 1. For each independent case, calculate any amortization of the net loss or gain that should be included as a component of pension expense for 2024. 2. For each independent case, determine the net loss-AOCI or net gain-AOCI as of January 1, 2025.

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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Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2024 are as follows: ($ millions) $480 350 75 45 P80 balance, January 11 Plan assets balance, January 1 Service cost Interest cost Gain from change in actuarial assumption Benefits paid Actual return on plan assets. Contributions 2024 26 (36) 23 65 The expected long-term rate of return on plan assets was 8%. There were no AOCI balances related to pensions on January 1, 2024, but at the end of 2024, the company amended the pension formula, creating a prior service cost of $13 million.
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