Question1

Warrick Boards calculated pension expense for its underfunded pension plan as follows:

($ in millions)Service cost$244Interest cost160Expected return on the plan assets ($110 actual, less $6 gain)(104)Amortization of prior service cost10Amortization of net loss2Pension expense$312

Required:

Which elements of Warrick's balance sheet are affected by the components of pension expense? What are the specific changes in these accounts?(Enter your answers in millions.)

question2 Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2021 (the end of Beale's fiscal year), the following pension-related data were available:

Projected Benefit Obligation($ in millions)Balance, January 1, 2021$500Service cost52Interest cost, discount rate, 5%25Gain due to changes in actuarial assumptions in 2021(9)Pension benefits paid(25)Balance, December 31, 2021$543

Plan Assets($ in millions)Balance, January 1, 2021$580Actual return on plan assets35(Expected return on plan assets, $40)Cash contributions76Pension benefits paid(25)Balance, December 31, 2021$666

January 1, 2021, balances:($ in millions)Pension asset$80Prior service costAOCI (amortization $8 per year)40Net gainAOCI (any amortization over 10 years)98

Required:

explain a pension spreadsheet to show the relationship among the PBO, plan assets, prior service cost, the net gain, pension expense, and the net pension asset.(Enter credit amounts with a minus sign and debit amounts with a positive sign. Enter your answers in millions.)

question 3

Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2021 (the end of Beale's fiscal year), the following pension-related data were available:

Projected Benefit Obligation($ in millions)Balance, January 1, 2021$640Service cost66Interest cost, discount rate, 5%32Gain due to changes in actuarial assumptions in 2021(16)Pension benefits paid(32)Balance, December 31, 2021$690

Plan Assets($ in millions)Balance, January 1, 2021$660Actual return on plan assets42(Expected return on plan assets, $47)Cash contributions83Pension benefits paid(32)Balance, December 31, 2021$753

January 1, 2021, balances:($ in millions)Pension asset$20Prior service costAOCI (amortization $4 per year)20Net gainAOCI (any amortization over 10 years)106

Required:

1. to 3.Prepare the 2021 journal entriesto record pension expense, to record any 2021 gains and losses and the contribution to plan assets and benefit payments to retirees.

4.Determine the balances at December 31, 2021, in the PBO, plan assets, the net gainAOCI, and prior service costAOCI [Hint: You might find T-accounts useful.]

5.What amount will Beale report in its 2021 balance sheet as a net pension asset or net pension liability for the funded status of the plan?