Refer to the situation described below Assume Electronic Distribution prepares its financial statements according to IFRA. Also, assume that 10% is the current interest rate on high- quality corporate bonds. S in millions PBO balance January 1 480 Plan assets balance January 1 300 Service cost 75 Interest cost 45 22 Gain from change in an actuarial assumption Benefits paid (36) Actual return on plan assets 20 Contributions 2021 60 Calculate the net pension cost for 2021, separating its components into appropriate categories for reporting.

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Refer to the situation described below Assume
Electronic Distribution prepares its financial
statements according to IFRA. Also, assume
that 10% is the current interest rate on high-
quality corporate bonds.
Sin millions
PBO balance January 1
480
Plan assets balance January 1
300
Service cost
75
Interest cost
45
Gain from change in an actuarial
assumption
22
Benefits paid
(36)
Actual return on plan assets
20
Contributions 2021
60
Calculate the net pension cost for 2021,
separating its components into appropriate
categories for reporting.
Prepare the journal entries to record (a) the
components of net pension cost, (b)gains or
losses, (c) past service cost, (d) funding, and (e)
payment of benefits for 2021.
What amount will Electronic Distribution report
in its 2021 balance sheet as a net pension asset
or net pension liability?
Transcribed Image Text:Refer to the situation described below Assume Electronic Distribution prepares its financial statements according to IFRA. Also, assume that 10% is the current interest rate on high- quality corporate bonds. Sin millions PBO balance January 1 480 Plan assets balance January 1 300 Service cost 75 Interest cost 45 Gain from change in an actuarial assumption 22 Benefits paid (36) Actual return on plan assets 20 Contributions 2021 60 Calculate the net pension cost for 2021, separating its components into appropriate categories for reporting. Prepare the journal entries to record (a) the components of net pension cost, (b)gains or losses, (c) past service cost, (d) funding, and (e) payment of benefits for 2021. What amount will Electronic Distribution report in its 2021 balance sheet as a net pension asset or net pension liability?
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