1. Briefly explain the following components of the companys pension expense for the 2016 U.S. plan: service cost, interest cost, and actuarial loss.

2. International Paper reports an actual return on plan assets for its U.S. Plans of $607 million for the year. Why is this different from the expected return of $815 million reported above? What is the reason for using expected return on plan assets to calculate periodic pension expense?

3. Prepare an adjustment journal entry for the year 2016 for the difference between actual return and expected return on plan assets that the company made to smooth pension expense and reduce earnings volatility.

(Note: Refer to the details for change in plan assets in Part A and use the information from the details of net periodic pension expense to make the adjustment entry)

4. Discuss the implications for changes in certain assumptions such as discount rate used to calculate service cost and PBO, interest rate and rate of compensation increase, and expected return on plan assets.

5. How should various pension components be reported in the income statement? How should an analyst view the changes in the pension components in evaluating a companys profitability?

International Paper Company disclosed the following pension information in its 2016 annual renort