Johnson \& Johnson provides the following footnote disclosures in its \(10-\mathrm{K}\) report relating to its defined

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a. How much pension expense does Johnson \& Johnson report in its 2007 income statement?

b. The company reports a \(\$ 809\) million expected return on pension plan assets as an offset to 2007 pension expense. Approximately, how is this amount computed? What is the actual gain or loss realized on its 2007 pension plan assets? What is the purpose of using this expected return instead of the actual gain or loss?

c. What factors affected the company's pension liability during 2007? What factors affected the pension plan assets during 2007 ?

d. What does the term funded status mean? What is the funded status of the 2007 pension plans and postretirement benefit plans?

e. The company increased its discount rate from \(6 \%\) to \(6.5 \%\) in 2007 . What effect(s) does this increase have on its balance sheet and its income statement?

f. How did Johnson \& Johnson's pension plan affect the company's cash flow in 2007?

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($ in millions) Change in Benefit Obligation Projected benefit obligation-beginning of year Service cost.... Interest cost.. Plan participant contributions Amendments Actuarial (gains) losses.. Divestitures & acquisitions.. Curtailments & settlements Benefits paid from plan Effect of exchange rates. Projected benefit obligation-end of year Change in Plan Assets Retirement Plans Other Benefit Plans 2007 2006 2007 2006 $11,660 10.171 $ 2,668 $2,325 597 552 140 122 656 570 149 136 62 47 14 7 (876) (99) (1) 130 79 443 101 (46) (7) - (481) (402) (255) (147) 337 378 12 1 $12,002 11,660 $ 2,721 $ 2,668 Plan assets at fair value-beginning of year $ 9,538 $ 8,108 30 $ 34. Actual return on plan assets.. 743 966 4 Company contributions... Plan participant contributions Settlements Divestitures & acquisitions... 317 259 250 2 141 62 47 (38) (7) 55 300 Benefits paid from plan assets. (481) (402) (255) (147) Effect of exchange rates... 273 267 - Plan assets at fair value-end of year $10,469 $ 9,538 $ 29 $ Funded status-end of year... $ (1,533) $ (2,122) $(2,692) 30 $(2,638)