Part 1 & 3
Event |
General journal |
Debit |
Credit |
1 |
Pension expense |
42 |
|
Plan assets |
42 |
||
Amortization of net gain—OCI |
4 |
||
Amortization of prior service cost—OCI |
5 |
||
PBO |
83 |
||
2 |
PBO |
11 |
|
Gain—OCI |
11 |
||
3 |
Loss—OCI |
5 |
|
Plan assets |
5 |
||
4 |
Plan assets |
78 |
|
Cash |
78 |
||
5 |
PBO |
27 |
|
Plan assets |
27 |
Part 4
Balances on Dec. 31, 2018
($ in millions)
PBO |
585 |
Plan assets |
648 |
Net gain – AOCI |
97 |
Prior service cost - AOCI |
20 |
Part 5
Balance Sheet as on 2016
Net pension asset |
$63 millions |
NOTES:
PBO = Service cost + interest cost = 56+27 = 83
Pension expense:
Service cost |
56 |
Interest cost |
27 |
Expected return on the plan assets ($37 actual, plus $5 loss) |
(42) |
Amortization of prior service cost |
5 |
Amortization of net gain |
(4) |
Pension expense |
42 |
Computation of net gain amortization:
Net gain—AOCI (previous gains exceeded previous losses) |
96 |
10% of $560 plan assets (greater than $540 PBO) |
(56) |
Amount to be amortized |
40 |
10 years |
|
Amortization |
4 |
Loss—OCI = actual return on assets – expected return = $5
PBO:
540 |
Jan. 1 balance |
||
56 |
Service cost |
||
27 |
Interest cost |
||
New gain |
11 |
||
Benefits paid |
27 |
||
585 |
Dec. 31 balance |
Plan Assets:
Jan. 1 balance |
560 |
||
Expected return |
42 |
||
Cash funding |
78 |
||
5 |
New loss |
||
27 |
Benefits paid |
||
Dec. 31 balance |
648 |
SHAREHOLDERS' EQUITY: ACCUMULATEDOTHER COMPREHENSIVE INCOME Net Gain—AOCI
96 |
Jan. 1 balance |
||
11 |
New gain |
||
New loss |
5 |
||
Amortized in 2018 |
5 |
||
97 |
Dec. 31 balance |
Prior Service Cost—AOCI
Jan. 1 balance |
25 |
||
5 |
Amortized in 2018 |
||
Dec. 31 balance |
20 |
Part 5
Plan assets |
- |
PBO |
= |
Net pension asset |
|
2017 |
560 |
- |
540 |
= |
20 |
2018 |
648 |
- |
585 |
= |
63 |
well you didnt have to answer it and let someone else help Beale Management has a noncontributory, defined ben...
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