Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2024, Lacy received the following information: ($ in millions) $ 600 62 14 Projected Benefit Obligation. Balance, January 1 Service cost Prior service cost Interest cost (5.0%) Benefits paid Balance, December 31 Plan Assets Balance, January 1 Actual return on plan assets Contributions 2024 Benefits paid Balance, December 31 30 (42) $ 664 ($ in millions) $ 250 28 62 (42) $ 298 The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2024. At the end of 2024, Lacy amended the pension formula creating a prior service cost of $14 million. Required: 1. Determine Lacy's pension expense for 2024. 2. Prepare the journal entry(s) to record Lacy's (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e) payment of retiree benefits for 2024.
Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2024, Lacy received the following information: ($ in millions) $ 600 62 14 Projected Benefit Obligation. Balance, January 1 Service cost Prior service cost Interest cost (5.0%) Benefits paid Balance, December 31 Plan Assets Balance, January 1 Actual return on plan assets Contributions 2024 Benefits paid Balance, December 31 30 (42) $ 664 ($ in millions) $ 250 28 62 (42) $ 298 The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2024. At the end of 2024, Lacy amended the pension formula creating a prior service cost of $14 million. Required: 1. Determine Lacy's pension expense for 2024. 2. Prepare the journal entry(s) to record Lacy's (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e) payment of retiree benefits for 2024.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter19: Accounting For Post Retirement Benefits
Section: Chapter Questions
Problem 4E
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![Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2024, Lacy received the following information:
($ in millions)
$ 600
Projected Benefit Obligation
Balance, January 1
Service cost
Prior service cost
Interest cost (5.0%)
Benefits paid
Balance, December 31
Plan Assets
Balance, January 1
Actual return on plan assets
Contributions 2024
Benefits paid
Balance, December 31
62
14
30
(42)
$ 664
($ in millions)
$ 250
28
62
(42)
$ 298
The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2024.
At the end of 2024, Lacy amended the pension formula creating a prior service cost of $14 million.
Required:
1. Determine Lacy's pension expense for 2024.
2. Prepare the journal entry(s) to record Lacy's (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e)
payment of retiree benefits for 2024.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9e50525e-d320-423e-86e5-aec92b61f215%2F838f0f21-96c5-47bb-bd02-4d1d39c8a2d1%2Funrpgzi_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2024, Lacy received the following information:
($ in millions)
$ 600
Projected Benefit Obligation
Balance, January 1
Service cost
Prior service cost
Interest cost (5.0%)
Benefits paid
Balance, December 31
Plan Assets
Balance, January 1
Actual return on plan assets
Contributions 2024
Benefits paid
Balance, December 31
62
14
30
(42)
$ 664
($ in millions)
$ 250
28
62
(42)
$ 298
The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2024.
At the end of 2024, Lacy amended the pension formula creating a prior service cost of $14 million.
Required:
1. Determine Lacy's pension expense for 2024.
2. Prepare the journal entry(s) to record Lacy's (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e)
payment of retiree benefits for 2024.
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