Question

Beale Management has a noncontributory, defined benefit penslon plan. On December 31, 2018 (the end of Beale's fiscal year), the following penslon-related data were avallable: Projected Benefit obligation Balance, January 1, 2818 (S in millions) $ 740 Service cost 76 Interest cost, discount rate, 5 % 37 Gain due to changes in actuarial assumptions in 2018 Pension benefits paid (21) (37) $ 795 Balance, December 31, 2018 ($ in millions) Plan Assets Balance, January 1, 2818 Actual return on plan assets (Expected return on plan assets, $52) 760 47 Cash contributions 88 Pension benefits paid (37) $ 858 Balance, December 31, 2818 ($ in millions) January 1, 2018, balances: Pension asset 20 Prior service cost-AOCI (amortization $7 per year) 35 Net gain-AOCI (any amortization over 18 years) 116 Required: 1. to 3. Prepare the 2018 Journal entry to record pension expense, to record any 2018 galns and losses and the contribution to plan assets and benefit payments to retirees. 4. Determine the balances at December 31, 2018, in the PBO, plan assets, the net galn-AOCI, and prior service cost-AOCI [Hint: You might find T-accounts useful.] 5. What amount will Beale report In Its 2018 balance sheet as a net pension asset or net penslon llability for the funded status of the plan?

Answer 1

solution working Note? I computation of Pension expenses Panticulan Amount (in millions) 76 37 (sal service cost Interest Cost expected return on the Plan assets Amortization af Prion service cost Amantization of net gain (Note-1) Pension expense - (4) 64 Note: 1 Amortization of not gain Net gain - AOCI - 116 10% 760 (760 is greater - 16 than 740-P Bo) Amount to be Amortizea divided by 90 10 Amortization $4

Journal entry to record Pension ① Prepantion of expenses Debit exediy pate Account title and explanation (in minulou (ihmilles 64 4 Pension exp Alc Plan Asset's Ale Amortization of het gain-OCT Amortization of Prior Sejuice (ost BBC (46437) (to record Version erfenire مد 13 recanding of gains elosses PBO ... ... or al To gain- ocg 1 Lossi og ––– Dr S s To Plan Assets (sq-ut) ③ recanding contribution to Plan Assets and benefit Payments to retirees. Plan Assets - - - - DV To cash 88 PBO - - - - - To Plan Assets Dr 34 37

4 Determination of Balances at December 31, 2018 PBO Alc Date particular Amount Amount particulons Date Jan-o1 new gain Benefits paid 21 37 740 76 37 795 service cost Interest cost Balance 31-Dec Plan Assets Jan-ol expected return cash funding Bal - 31 dec 766 52 88 858 s 34 new loss Benefits Paid het gain - AOCI 4 * new loss Amantization in S u 116 Jan-ol 21 new gain 00 २०१ 121 Bal-31 doc

Prior service cost - AOCI Jan-ol 35 Amantitated in 2018 Benefits Paid Bal-31 der 28 ③ computation of Amount that Beale verant in it's doll balance sheet as a net Pension Assetcon net pension liability for the fundwa status of the Plan mu تمہ کرہ لیہ کہ year Plan Assets – PBO = Met pension Assed 2014 700 - 740 = 20 2018 858 - 795 - 63 suggestions the Pension Plan is over funded Reale will refont a net Penian Asset af 163 millions
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