Question

Exercise 17-19 (Algo) Record pension expense, funding, and gains and losses; determine account balances [LO17-6, 17-7, 17-8] 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 $ 420 Service cost 44 Interest cost, discount rate, 5x Gain due to changes in actuarial assumptions in 2021 (12) Pension benefits paid (21) Balance, December 31, 2021 $ 452 21 ($ in millions) $ 440 31 Plan Assets Balance, January 1, 2021 Actual return on plan assets (Expected return on plan assets, $36) Cash contributions Pension benefits paid Balance, December 31, 2021 72 (21) $ 522 January 1, 2021, balances: Pension asset Prior service cost-AOCI (amortization $5 per year) Net gain-AOCI (any amortization over 12 years) (s in millions) $20 35 Required: 1. to 3. Prepare the 2021 Journal entries to 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 gain-AOCI, and prior service cost-AOCI (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?

Answer 1

Answer Page No 0 107. of greater of PBQx planasscto Ho3 $ 4 million Amortization Net gain Aoc? Amortization years $84 million – 10 %8440 million to years Pension experse - Service cont + Potenet conf - expected relwrnon plan aseta + Amortization of prior service cost – amortiza - tion of net gais (44+01 - 36 +5 -4 ) million = $30 million Particular Debit millionGredit/millier $30 Plan assets $36 ISING Pension expense 1 $ 4 $65 #12 - Amortization net gain - oc? Amortization of prior Service cost-oc! PBO (44+2i) PBO Gain - oci loss -och (36-31) Plan assets Plan assets $12 ST $5 $72. 4, cash $72. $21 $21 5 PBO Plan assets PBO (million) gain from change $12 in assumption Benfit paid $21 Begibal 420 suivice cost Interest COSE End. Bal *44 $21 3452

Plan anels (million @ Page: No $5 *2) Begi Net loss Benebilă paid bal $ 440 Expected return on plan assets $36 Contribution End Bal. $522 Het gaun aoca (million) 672 Net loss Amortization $ 5 $4 Begibal Net gain $84 612 Endi bal $87 Prior service cord Aoc (million) Amortization $5 Begobal $35 $30 End.bal Balances on dec 31, 2021 (millions) PBO $452 Plan assets $502 Net gais-no Cî $87 Prior service cost-Aoc 1 $30 The net pension asseto -622-45a) million & 70 million Balance sheet as of 2021( million) Net pension assels $0