Question
Problem 17-16 Comprehensive-reporting a pension plan; pension spreadsheet; determine changes in balances; two years [LO17-3, 17-4, 17-5, 17-6, 17-7, 17-8] [The following information applies to
Problem 17-16 Comprehensive-reporting a pension plan; pension spreadsheet; determine changes in balances; two years [LO17-3, 17-4, 17-5, 17-6, 17-7, 17-8]
[The following information applies to the questions displayed below.] Actuary and trustee reports indicate the following changes in the PBO and plan assets of Lakeside Cable during 2018:
Prior service cost at Jan. 1, 2018, from plan amendment at the beginning of 2016 (amortization: $6 million per year) | $ | 50 | million |
Net losspensions at Jan.1, 2018 (previous losses exceeded previous gains) | $ | 60 | million |
Average remaining service life of the active employee group | 10 | years | |
Actuarys discount rate | 8 | % | |
($ in millions)
PBO | Plan Assets | ||||||||
Beginning of 2018 | $ | 500 | Beginning of 2018 | $ | 360 | ||||
Service cost | 66 | Return on plan assets, | |||||||
Interest cost, 8% | 40 | 7.5% (10% expected) | 27 | ||||||
Loss (gain) on PBO | (4 | ) | Cash contributions | 65 | |||||
Less: Retiree benefits | (52 | ) | Less: Retiree benefits | (52 | ) | ||||
End of 2018 | $ | 550 | End of 2018 | $ | 400 | ||||
Problem 17-16 Part 4
Assume the following actuary and trustee reports indicating changes in the PBO and plan assets of Lakeside Cable during 2019: ($ in millions)
PBO | Plan Assets | ||||||||
Beginning of 2019 | $ | 550 | Beginning of 2019 | $ | 400 | ||||
Service cost | 56 | Return on plan assets, | |||||||
Interest cost, 8% | 44 | 17% (10% expected) | 68 | ||||||
Loss (gain) on PBO | 5 | Cash contributions | 48 | ||||||
Less: Retiree benefits | (34 | ) | Less: Retiree benefits | (34 | ) | ||||
End of 2019 | $ | 621 | End of 2019 | $ | 482 | ||||
4-a. Determine Lakesides pension expense for 2019. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)
4-b. Prepare the appropriate journal entries to record the expense, the cash funding of plan assets, and payment of benefits to retirees. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)
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