Question

Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2018 (the end of Beale's fiscal year), the following pension-related data were available: ༧ Projected Benefit Obligation Balance, January 1, 2018 Service cost Interest cost, discount rate, 5% Gain due to changes in actuarial assumptions in 2018 Pension benefits paid Balance, December 31, 2018 ($ in millions) $ 400 42 20 (11) (20) $ 431 ($ in millions) $ 420 30 Plan Assets Balance, January 1, 2018 Actual return on plan assets (Expected return on plan assets, $35) Cash contributions Pension benefits paid Balance, December 31, 2018 71 (20) $ 501 ($ in millions) $ 29 January 1, 2018, balances: Pension asset Prior service cost-AOCI (amortization $4 per year) Net gain-AOCI (any amortization over 10 years) 28 82 Required: 1. to 3. Prepare the 2018 journal entry to record pension expense, to record any 2018 gains and losses and the

Answer 1

Solution Working note 1: Computation of pension expenses. Particulars Amount (8 millions) $ Service cart Interes cast 42 20 (35) 4 Cexpected returpon the Plan assds, Amanahon of prior Seryto. (Note 1) Pension Expense. Amortization of net gain (4) 27 Notein! Amortization of melgain Net gain - AOCI 82 42 107. 01420 (420 8 greater them C400-PBO divided by Amount to be fr 40 amortized I Amortizations cs Scanned with CamScanner

Debet 4 Preparation of Journal entry to record pension axpenses Date particulars Credet ( millions) (million] Pension lexp Ale 21 plan Assets A/C 35 Amortizators of not gain -Oc1 Amortizachon of 4 Pror Sewnio cost GQ PBO (4ata09 (to record pension exponse) Debet Crodet (milien) Dr 11 11 Recording of gams p lowes (million) PBO.. To gain col) Los coch) 5 5 R To plan asets. <'35-30) CS Scanned with CamScanner

Plan Aads. S Janol pour expected values 35 Cash Funding ? Bido Balona 50| 1420 Newlon Benefit pard - 20 to net K 82 new los '5 gain A ocl cos Jana new gain Bide Balona Amortization 4 in 2018 Prpor Service cost - AOCIAL Janol 244 Amortized 28 h 2018 benelets poud 31 Dee 247 CS Scanned with CamScanner

m payment to retiness Plon Assels To Cash D * Recording Contribution to plon assets and benefit Desit &m ib 71 Prati 71 PBO 20 To plan assels, Determination of balance at Decombes 31 2018 PBO ALC กังวาน Dare Particulas Amount (milliers) Dak Pabiculo Aricant (wien Janol Balance 740400 11 Service cost 42 20 Interst Cost 20 031 Da A 431 Co new gain Benclik pard CS Scanned with CamScanner

③ Computachers of Amount that below bodle report in its 2018 balanceshoot as lat net pensions Asset(o) net pensions liability for the funded status of plan year planassels planassals – PBO Net pension asset Dort 420 400 70 rolure 2018 501 - 431 Suggestion: The Panflen I plan is ove funded. Beale will repost a net pension aset of 70 million. cs Scanned with CamScanner
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