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silasjob09
16.10.2020 •
Business
Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2021 are as follows: ($ millions)
PBO balance, January 1 $530
Plan assets balance, January 1 300
Service cost 50
Interest cost 30
Gain from change in actuarial assumption 36
Benefits paid (46 )
Actual return on plan assets 23
Contributions 2021 40
The expected long-term rate of return on plan assets was 9%. There were no AOCI balances related to pensions on January 1, 2021, but at the end of 2021, the company amended the pension formula, creating a prior service cost of $18 million.
Required:
a. Calculate the pension expense for 2021.
b. Prepare the journal entries to record (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e) payment of benefits for 2021.
c. What amount will Electronic Distribution report in its 2021 balance sheet as a net pension asset or net pension liability?
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Ответ:
Please see below
Explanation:
1. Calculate the pension expense for 2021.
($ millions)
Service cost. $50
Interest cost. $30
Expected return on the plan assets
(1,300 × 6%). ($78)
Amortization of prior service cost $
Amortization of net gain or loss - AOCI $
Pension expense $2
2. Journal expense to record pension expense, gains or losses, prior service cost, funding and payment of benefits for 2021.
1.
Pension expense. Dr $2
Plan assets [expected return on assets] Dr $78
To PBO (50 + 30) Cr $80
(To record the pension expense)
2.
Prior service cost - OCI Dr $18
To PBO Cr $18
(To record the prior service cost)
3.
PBO Dr $36
To Gain - OCI Cr $36
(To record the gain from change in actuarial assumption)
4.
Loss- OCI [1,300 × 6%] - ($23). Dr $55
To Plan assets Cr. $55
(To record the gain or loss on assets)
5.
Plan assets. Dr $40
To Cash Cr. $40
(To record the funding)
6.
PBO Dr $46
To Plan assets. Cr 46
(To record the retiree benefits)
3. What amount will electronic distribution report in its 2021 balance sheet as a net pension asset or net pension liability.
PBO balance, Jan 1 $530
Service cost. $50
Interest cost. $30
Gain from change in actuarial assumption. ($36)
Prior service cost(New). $18
Benefit paid ($46)
PBO balance, December 31. $546
Plan assets balance, Jan 1. $300
Actual return on plan assets $23
Contributions $40
Benefits paid ($46)
Plan assets balance, December 31 $317
PBO balance, December 31 $546
Plan assets balance, December 31 $317
Net pension liability. $229
Ответ:
what deos that mean
Explanation: