Problem 17-12 (Algo) Determine pension expense; journal entries; two years [LO17-3, 17-4, 17-5, 17-6, 17- 7, 17-8] The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2024 and 2025 are presented below ($ in millions): Information Provided by Pension Plan Actuary: a. Projected benefit obligation as of December 31, 2023 = $2,150. b. Prior service cost from plan amendment on January 2, 2024 = $650 (straight-line amortization for 10-year average remaining service period). c. Service cost for 2024 = $570. d. Service cost for 2025 = $620. e. Discount rate used by actuary on projected benefit obligation for 2024 and 2025 = 10%. f. Payments to retirees in 2024 = $430. g. Payments to retirees in 2025 = $500. h. No changes in actuarial assumptions or estimates. i. Net gain-AOCI on January 1, 2024 = $255. j. Net gains and losses are amortized for 10 years in 2024 and 2025. Information Provided by Pension Fund Trustee: a. Plan asset balance at fair value on January 1, 2024 = $1,600. b. 2024 contributions = $590. c. 2025 contributions = $640. d. Expected long-term rate of return on plan assets = 12%. e. 2024 actual return on plan assets = $140. f. 2025 actual return on plan assets = $190. Required: 1. Calculate pension expense for 2024 and 2025.
Problem 17-12 (Algo) Determine pension expense; journal entries; two years [LO17-3, 17-4, 17-5, 17-6, 17- 7, 17-8] The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2024 and 2025 are presented below ($ in millions): Information Provided by Pension Plan Actuary: a. Projected benefit obligation as of December 31, 2023 = $2,150. b. Prior service cost from plan amendment on January 2, 2024 = $650 (straight-line amortization for 10-year average remaining service period). c. Service cost for 2024 = $570. d. Service cost for 2025 = $620. e. Discount rate used by actuary on projected benefit obligation for 2024 and 2025 = 10%. f. Payments to retirees in 2024 = $430. g. Payments to retirees in 2025 = $500. h. No changes in actuarial assumptions or estimates. i. Net gain-AOCI on January 1, 2024 = $255. j. Net gains and losses are amortized for 10 years in 2024 and 2025. Information Provided by Pension Fund Trustee: a. Plan asset balance at fair value on January 1, 2024 = $1,600. b. 2024 contributions = $590. c. 2025 contributions = $640. d. Expected long-term rate of return on plan assets = 12%. e. 2024 actual return on plan assets = $140. f. 2025 actual return on plan assets = $190. Required: 1. Calculate pension expense for 2024 and 2025.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
ul.3
![Problem 17-12 (Algo) Determine pension expense; journal entries; two years [LO17-3, 17-4, 17-5, 17-6, 17-
7,17-8]
The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2024 and 2025 are
presented below ($ in millions):
Information Provided by Pension Plan Actuary:
a. Projected benefit obligation as of December 31, 2023 = $2,150.
b. Prior service cost from plan amendment on January 2, 2024 = $650 (straight-line amortization for 10-year average remaining service
period).
c. Service cost for 2024 = $570.
d. Service cost for 2025 = $620.
e. Discount rate used by actuary on projected benefit obligation for 2024 and 2025 = 10%.
f. Payments to retirees in 2024 = $430.
g. Payments to retirees in 2025 = $500.
h. No changes in actuarial assumptions or estimates.
i. Net gain—AOCI on January 1, 2024 = $255.
j. Net gains and losses are amortized for 10 years in 2024 and 2025.
Information Provided by Pension Fund Trustee:
a. Plan asset balance at fair value on January 1, 2024 = $1,600.
b. 2024 contributions = $590.
c. 2025 contributions = $640.
d. Expected long-term rate of return on plan assets = 12%.
e. 2024 actual return on plan assets = $140.
f. 2025 actual return on plan assets = $190.
Required:
1. Calculate pension expense for 2024 and 2025.
re
Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Required 1
equi
CITT
Calculate pension expense for 2024 and 2025.
Note: Amounts to be deducted should be indicated with a minus sign. Do not round intermediate calculations. Enter your
answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).
Service cost
Interest on PBO
Expected return
Amortization of prior service cost
Amortization of net gain
Pension expense
($ in millions)
2024
2025
$
570.0 $
280.0
(192.0)
65.0
620.0
327.0 ×
(228.0)
65.0
(4.0)
(8.5)
$
719.0
$
775.5](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb1df83bb-7fec-49a0-9789-38420e065d59%2F36f6a3ec-928a-47aa-b6ac-20d0e7029c4b%2F33c5s6j_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 17-12 (Algo) Determine pension expense; journal entries; two years [LO17-3, 17-4, 17-5, 17-6, 17-
7,17-8]
The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2024 and 2025 are
presented below ($ in millions):
Information Provided by Pension Plan Actuary:
a. Projected benefit obligation as of December 31, 2023 = $2,150.
b. Prior service cost from plan amendment on January 2, 2024 = $650 (straight-line amortization for 10-year average remaining service
period).
c. Service cost for 2024 = $570.
d. Service cost for 2025 = $620.
e. Discount rate used by actuary on projected benefit obligation for 2024 and 2025 = 10%.
f. Payments to retirees in 2024 = $430.
g. Payments to retirees in 2025 = $500.
h. No changes in actuarial assumptions or estimates.
i. Net gain—AOCI on January 1, 2024 = $255.
j. Net gains and losses are amortized for 10 years in 2024 and 2025.
Information Provided by Pension Fund Trustee:
a. Plan asset balance at fair value on January 1, 2024 = $1,600.
b. 2024 contributions = $590.
c. 2025 contributions = $640.
d. Expected long-term rate of return on plan assets = 12%.
e. 2024 actual return on plan assets = $140.
f. 2025 actual return on plan assets = $190.
Required:
1. Calculate pension expense for 2024 and 2025.
re
Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Required 1
equi
CITT
Calculate pension expense for 2024 and 2025.
Note: Amounts to be deducted should be indicated with a minus sign. Do not round intermediate calculations. Enter your
answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).
Service cost
Interest on PBO
Expected return
Amortization of prior service cost
Amortization of net gain
Pension expense
($ in millions)
2024
2025
$
570.0 $
280.0
(192.0)
65.0
620.0
327.0 ×
(228.0)
65.0
(4.0)
(8.5)
$
719.0
$
775.5
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education