Analyzing and Interpreting Pension Disclosures DowDuPoint's 10-K report has the following disclosures related to its retirement plans ($ millions).

Obligations and Funded Status ($ millions)	December 31, 2018
Change in projected benefit obligations
Benefit obligations at beginning of year	$57,401
Service cost	651
Interest cost	1,638
Plan participants' contributions	29
Acturarial changes in assumptions and experience	(2,832)
Benefits paid	(3,223)
Plan amendments	34
Acquisitions/divestitures/other	(57)
Effect of foreign exchange rates	(627)
Benefit obligation at end of year	$53,014
Change in plan assets
Fair value of plan assets at beginning of year	$43,685
Actual gain on plan assets	(1,524)
Employer contributions	2,964
Plan participants' contributions	29
Benefits paid	(3,223)
Acquisitions/divestitures/other	(7)
Effect of foreign exchange rates	(462)
Fair value of plan assets at end of year	$41,462
Funded status
U.S. plan with plan assets	$(6,956)
Non-U.S. plans with plan assets	(2,751)
All other plans	(1,845)
Funded status at end of year	$(11,552)

Components of Net Periodic Benefit Cost ($ millions)	December 31, 2018
Net periodic benefit
Service cost	$651
Interest cost	1,638
Expected return on plan assets	(2,846)
Amortization of prior service cost	(24)
Amortization of unrecognized (gain) loss	649
Curtailment/settlement/other	(10)
Net periodic benefit costs --Total	$58

Weighted-average assumptions used to Determine Net periodic benefit cost for years ended Dec. 31	2018	2017
Discount Rate	3.80%	3.26%
Expected return on plan assets	6.68%	6.94%
Rate of compensation increase	3.95%	3.88%

The following benefit payments, which reflect future service, as appropriate, are expected to be paid:

($ millions)	Pension Benefits
2019	$3,197
2020	3,172
2021	3,182
2022	3,198
2023	3,219
2024-2028	16,078
Total	$32,046

HINT: Do not use negative signs with your answers.

(a) How much pension expense (revenue) does DowDuPont report in its 2018 income statement?

DowDuPont reports pension Answerexpenserevenue of $Answer million.

(b) DowDuPont reports a $2,846 million expected return on pension plan assets as an offset to 2018 pension expense. Estimate what the expected return would have been had DowDupont not changed the assumption on the expected return in 2018. (Round your dollar answers to the nearest whole number.)

$Answer million What is DowDuPont's actual gain or loss realized on its 2018 pension plan assets?

Answer ($ million) Answergainloss (c) What main factors affected DowDuPont's pension liability during 2018?

Investment gains and employer contributions increased the plan assets. Service costs, interest costs, and actuarial losses increased the pension liability, and benefit payments reduced the liability. Benefits were paid directly by the company and did not affect plan assets

Investment gains and employer contributions increased the plan assets, and benefits paid reduced plan assets. Service costs and actuarial losses increased the pension liability, and benefit payments reduced the liability. Interest reflects the amount the company paid to its lenders and did not affect the pension obligation directly.

Investment gains and employer contributions increased the plan assets, and benefits paid reduced plan assets. Service costs and interest costs increased the pension liability, and benefit payments and actuarial gains reduced the liability.

Investment gains and employer contributions increased the plan assets, and benefits paid reduced plan assets. Service costs, interest costs and actuarial losses decreased the pension liability, and benefit payments reduced the liability.

(d) What does the term funded status mean?

"Funded status" reveals how much cash the plan has.

"Funded status" reflects the contributions that the company has made to the plan.

"Funded status" is the excess or deficiency of the pension obligation over plan assets.

"Funded status" refers to the extent to which the plan assets are invested in mutual funds.

What is the funded status of the 2018 DowDuPont pension plans?

DowDuPont's pension plan is Answeroverfundedunderfunded by $Answer million (e) DowDuPont increased its discount rate during 2018. What effect(s) does this decrease have on its balance sheet?

An increase in the discount rate increases the PBO reported on the balance sheet.

An increase in the discount rate decreases the PBO reported on the balance sheet.

An increase in the discount rate has no effect on the PBO reported on the balance sheet.

(f) How did DowDuPont's pension plan affect the company's cash flow in 2018?

The company's cash flow increased as the increase in pension assets more than offset the increase in the PBO.

There was no effect on the company's cash flow as all benefit payments are paid from plan assets.

The company contributed cash to its pension plan in 2018. This contribution directly affected the company's cash flow.

The company's cash flow increased by the gains on the plan's investment portfolio and decreased by the benefits paid to plan participants.

(g) Explain how the returns on pension assets affect the amount of cash that DowDuPont must contribute to fund the pension plan.

Should pension investments decline as a result of a decline in the financial markets, DowDuPont might be required to increase its cash contribution to the pension plan.

Asset returns have no effect on DowDuPont's cash flow because they are recognized in the pension plan and not on the company's financial statements.

Asset returns have no effect on DowDuPont's cash flow because increases in the PBO provide whatever financing the plan needs.

Asset returns have no effect on DowDuPont's cash flow because employee contributions make up any shortfall.