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A company has a noncontributory, defined benefit pension plan. At December 31 of the current year, the company received the following information: Projected Benefit Obligation
A company has a noncontributory, defined benefit pension plan. At December 31 of the current year, the company received the following information:
Projected Benefit Obligation | ($ in millions) |
---|---|
Balance, January 1 | $ 160 |
Service cost | 24 |
Interest cost | 16 |
Benefits paid | (11) |
Balance, December 31 | $ 189 |
Plan Assets | |
---|---|
Balance, January 1 | $ 80 |
Actual return on plan assets | 11 |
Contributions current year | 24 |
Benefits paid | (11) |
Balance, December 31 | $ 104 |
The expected long-term rate of return on plan assets was 10%. There was no prior service cost and a negligible net lossAOCI on January 1 of the current year.
Required:
Determine the companys pension expense for the current year.
Prepare the journal entries to record the companys (a) pension expense, (b) funding, and (c) payment for the current year.
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