Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2021, Lacy received the following information: Projected Benefit obligation Balance, January 1 Service
Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2021, Lacy received the following information: Projected Benefit obligation Balance, January 1 Service cost Prior service cost Interest cost(5.0%) Benefits paid Balance, December 31 ($ in millions) $1,320 100 52 66 (99) $1,439 Plan Assets Balance, January 1 Actual return on plan assets Contributions 2021 Benefits paid Balance, December 31 ($ in millions) $ 630 65 100 (99) $ 696 The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2021. At the end of 2021, Lacy amended the pension formula creating a prior service cost of $52 million. Required: 1. Determine Lacy's pension expense for 2021. 2. Prepare the journal entry(s) to record Lacy's (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e) payment of retiree benefits for 2021
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started