Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Reformulating Financial Statements for Pension Contributions American Airlines reports the following pension and retiree health care (Other) footnote as part of its 10-K report. ($

image text in transcribedimage text in transcribed

Reformulating Financial Statements for Pension Contributions American Airlines reports the following pension and retiree health care ("Other") footnote as part of its 10-K report. ($ millions) 2016 2017 2018 Total Assets $51,274 $51,396 $60,580 ($ millions) 2016 2017 2018 Fair value of plan assets at beginning of period $9,707 $10,017 $11,395 Actual return on plan assets 915 1,797 (1.151) Employer contributions 32 286 475 Settlements (2) (4) Benefit payments (635) (726) (662) Other 25 Fair value of plan assets at end of period $10,017 $11,395 $10,053 Use the above information, along with the two prior years' information below, to answer the requirements. $ millions 2016 2017 2018 Cash contributions to pension plan $32 $286 $475 a. Use the three-year average of the employer contribution to pension benefits (in dollar terms) to reformulate the statement of cash flows for each of the three years 2016, 2017, and 2018. See Analyst Adjustments 10.2 for guidance in the reformulation process. Compute the 3 year average employer contribution to pension benefits, Round to the nearest whole number. $ 0 X ($ millions) Use rounded figure for subsequent computations. Use negative signs with answers to indicate adjustments that reduce account balances. Statement of Cash Flow Adjustments 2016 2017 2018 Cash contribution 32 x $ 286 X $ 475 x Cash from operations 0 x $ 0 x $ 0 x $ b. Reformulate the balance sheet for each of the three years 2016, 2017, and 2018. Assume a tax rate of 22%. Round answers to the nearest whole number. Use negative signs with answers to indicate adjustments that reduce account balances. 2016 2017 2018 Balance Sheet Adjustments Cash balance Deferred tax liabilities $ 0 x $ 0 x $ 0 x $ 0 x $ 0 X $ 0 x Pension plan assets ta 0 x $ 0 x $ 0 x Reformulating Financial Statements for Pension Contributions American Airlines reports the following pension and retiree health care ("Other") footnote as part of its 10-K report. ($ millions) 2016 2017 2018 Total Assets $51,274 $51,396 $60,580 ($ millions) 2016 2017 2018 Fair value of plan assets at beginning of period $9,707 $10,017 $11,395 Actual return on plan assets 915 1,797 (1.151) Employer contributions 32 286 475 Settlements (2) (4) Benefit payments (635) (726) (662) Other 25 Fair value of plan assets at end of period $10,017 $11,395 $10,053 Use the above information, along with the two prior years' information below, to answer the requirements. $ millions 2016 2017 2018 Cash contributions to pension plan $32 $286 $475 a. Use the three-year average of the employer contribution to pension benefits (in dollar terms) to reformulate the statement of cash flows for each of the three years 2016, 2017, and 2018. See Analyst Adjustments 10.2 for guidance in the reformulation process. Compute the 3 year average employer contribution to pension benefits, Round to the nearest whole number. $ 0 X ($ millions) Use rounded figure for subsequent computations. Use negative signs with answers to indicate adjustments that reduce account balances. Statement of Cash Flow Adjustments 2016 2017 2018 Cash contribution 32 x $ 286 X $ 475 x Cash from operations 0 x $ 0 x $ 0 x $ b. Reformulate the balance sheet for each of the three years 2016, 2017, and 2018. Assume a tax rate of 22%. Round answers to the nearest whole number. Use negative signs with answers to indicate adjustments that reduce account balances. 2016 2017 2018 Balance Sheet Adjustments Cash balance Deferred tax liabilities $ 0 x $ 0 x $ 0 x $ 0 x $ 0 X $ 0 x Pension plan assets ta 0 x $ 0 x $ 0 x

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Mathematics Of Finance

Authors: Robert Brown, Petr Zima

2nd Edition

0071756051, 9780071756051

More Books

Students also viewed these Finance questions

Question

Did the researcher provide sufficient description?

Answered: 1 week ago