Reformulating Financial Statements for Pension Contributions

Xerox Corporation reports the following pension and retiree health care (Other) footnote as part of its 10-K report.

December 31, 2015 ($ millions)	Pension Benefits	Retiree Health
Change in Benefit Obligation
Benefit obligation, January 1	$ 12,299	$ 957
Service cost	36	7
Interest cost	295	34
Plan participants contributions	4	14
Actuarial loss	(332)	(4)
Currency exchange rate changes	(538)	(25)
Plan amendments and curtailments	(17)	(31)
Benefits paid/settlements	(638)	(77)
Benefit obligation, December 31	$ 11,109	$ 875
Change in Plan Assets
Fair value of plan assets, January 1	$ 9,608	$ -
Actual return on plan assets	(89)	-
Employer contribution	329	63
Plan participants contributions	4	14
Currency exchange rate changes	(440)	-
Benefits paid/settlements	(638)	(77)
Other	(4)	-
Fair value of plan assets, December 31	$ 8,770	$ -
Net funded status at December 31	$ (2,339)	$ (875)

December 31, 2015 ($ millions)	Pension Benefits	Retiree Health
Components of Net Periodic Benefit Cost
Service cost	$ 36	$ 7
Interest cost	295	34
Expected return on plan assets	(376)	-
Recognized net actuarial loss	96	1
Amortization of prior service credit	2	(18)
Recognized settlement loss	89	-
Recognized curtailment loss	-	(22)
Defined benefit plans	142	2
Defined contribution plans	100	-
Total net periodic cost	$ 242	$ 2
Other Changes in Plan Assets and Benefit Obligations
Recognized in Other Comprehensive Income
Net actuarial loss	$ 125	$ (4)
Prior service credit	(16)	(32)
Amortization of net actuarial loss	(185)	$(1)
Amortization of net prior service credit	(2)	18
Curtailment gain	-	22
Total recognized in other comprehensive income	$ (78)	$ 3

Use the above information, along with the two prior years information below, to answer the requirements.

$ millions	2013	2014
Cash contributions to pension plan	$260	$314

Use rounded figure for subsequent computations.

Use negative signs with answers to indicate adjustments that reduce account balances.

Statement of Cash Flow Adjustments	2013	2014	2015
Cash contribution	Answer	Answer	Answer
Cash from operations	Answer	Answer	Answer

b. Reformulate the balance sheet for each of the three years 2013, 2014, and 2015.

• Assume a tax rate of 35%.

• Round answers to the nearest whole number.

• Use negative signs with answers to indicate adjustments that reduce account balances.

Balance Sheet Adjustments	2013	2014	2015
Cash balance	Answer	Answer	Answer
Deferred tax assets	Answer	Answer	Answer
Total assets	Answer	Answer	Answer
Retained earnings	Answer	Answer	Answer