1. The following data relate to Voltaire Companys defined benefit pension plan:

plan assest at fair value, January 1 $600 million

expected return on plan assests $60 million

actual return on plan assets $48 million

contributions to the pension

fund (end of year) $100 million

Amortization of net loss $10 million

Pension benefits paid $11 million

Pension expense $72 million

Determine the amount of plan assets at fair value on December 31.

2. Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2013, Abbott and Abbott received the following information:

projected benefit obligation ($in millions)

balance, Jan 1 $120 mil

service cost 20

intereset cost 12

benefits paid (9)

balance, dec 31 $143 mill

Plan assets

balance, Jan 1 $80

actual return on plan assets 9

contributions 2013 20

benefits paid (9)

balance, dec 31 $100

The expected long-term rate of return on plan assets was 10%. There was no prior service cost and a negligible net loss-AOCI on January 1, 2013.

Required:

1. Determine Abbott and Abbotts pension expense for 2013.

2. Prepare the journal entries to record Abbott and Abbotts pension expense, funding, and payment for 2013.

Clark Industries has a defined benefit pension plan that specifies annual retirement benefits equal to:

1.2% Service years Final years salary

Stanley Mills was hired by Clark at the beginning of 1994. Mills is expected to retire at the end of 2038 after 45 years of service. His retirement is expected to span 15 years. At the end of 2013, 20 years after being hired, his salary is $80,000. The companys actuary projects Millss salary to be $270,000 at retirement. The actuarys discount rate is 7%.

Required:

1. Estimate the amount of Stanley Millss annual retirement payments for the 15 retirement years earned as of the end of 2013. 2. Suppose Clarks pension plan permits a lump-sum payment at retirement in lieu of annuity payments. Determine the lump-sum equivalent as the present value as of the retirement date of annuity payments during the retirement period. 3. What is the companys projected benefit obligation at the end of 2013 with respect to Stanley Mills? 4. Even though pension accounting centers on the PBO calculation, the ABO still must be disclosed in the pension disclosure note. What is the companys accumulated benefit obligation at the end of 2013 with respect to Stanley Mills? 5. If we assume no estimates change in the meantime, what is the companys projected benefit obligation at the end of 2014 with respect to Stanley Mills? 6. What portion of the 2014 increase in the PBO is attributable to 2014 service (the service cost component of pension expense) and to accrued interest (the interest cost component of pension expense)?