Problem 17-17 Integrating Problem-Deferred tax effects of pension entries; integrate concepts learned in Chapter 16 [LO17-7]

To focus on the core issues, we ignored the income tax effects of the pension amounts we recorded in the chapter. Reproduced below are the journal entries from the chapter that Global Communications used to record its pension expense and funding in 2013 and the new gain and loss that occurred that year.

	($ in millions)
To Record Pension Expense
Pension expense (total)	41
Plan assets (expected return on plan assets)	23
PBO ($39 service cost + $20 interest cost)		59
Prior service costAOCI (2013 amortization)		3
Net lossAOCI (2013 amortization)		2
To Record Funding
Plan assets	46
Cash (contribution to plan assets)		46
To Record Payment of Benefits
PBO	40
Plan assets (retiree benefits)		40
To Record Gains and Losses
LossOCI (from change in assumption)	21
PBO		21
Plan assets	3
GainOCI (from actual return exceeding expected return)		3

Required:

1.

Recast these journal entries to include the income tax effects of the events being recorded. Assume that Globals tax rate is 40%. [Hint: Costs are incurred and recognized for financial reporting purposes now, but the tax impact comes much laterwhen these amounts are deducted for tax purposes as actual payments for retiree benefits occur in the future. As a result, the tax effects are deferred, creating the need to record deferred tax assets and deferred tax liabilities. So, you may want to refer back to Chapter 16 to refresh your memory on these concepts.] (If no entry is required for a particular 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).)

2.	Prepare a statement of comprehensive income for 2013 assuming Global's only other sources of comprehensive income were net income of $320 million and a $25 million unrealized holding gain on investments in securities available for sale. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)