Record pension expense, funding, and (answer attached) - 14420

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E 17-19 Record pension expense, funding, and gains and losses; determine account balances

 

 

 

Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2011 (the end of Beale’s fiscal year), the following pension-related data were available:

 

 

 

 

Projected Benefit Obligation

 

 

($in millions)

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1, 2011

 

 

$480

 

 

 

 

Service cost

 

 

82

 

 

 

 

Interest cost, discount rate, 5%

 

 

24

 

 

 

 

Gain due to changes in actuarial assumptions in 2011

 

 

(10)

 

 

 

 

Pension benefits paid

 

 

(40)

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2011

 

 

$536

 

 

 

 

 

 

 

 

 

 

 

 

Plant Assets

 

 

 

 

 

 

 

Balance, January 1, 2011

 

 

$500

 

 

 

 

Actual return on plan assets

 

 

40

 

 

 

 

(Expected return on plan assets, $45)

 

 

 

 

 

 

 

Cash Contributions

 

 

70

 

 

 

 

Pension benefits paid

 

 

(40)

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2011

 

 

$570

 

 

 

 

 

 

 

 

 

 

 

 

January 1, 2011, balances:

 

 

 

 

 

 

 

Pension asset

 

 

$20

 

 

 

 

Prior service cost-AOCI (amortization $8 per year)

 

 

48

 

 

 

 

Net gain-AOCI (any amortization over 15 years)

 

 

80

 

 

 

 

Required:

1.Prepare the 2011 journal entry to record pension expense.

2.Prepare the journal entry(s) to record any 2011 gains and losses.

3.Prepare the 2011 journal entries to record the contribution to plan assets and benefit payments to retirees.

4.Determine the balances at December 31, 2011, in the PBO, plan assets, the net gain-ACOI, and prior service cost-ACOI and show how the balances changed during 2011. [Hint: You might find T-accounts useful.]

5.What amount will Beale report in its 2011 balance sheet as a net pension asset or net pension liability for the funded status of the plan?

p.s I really need some tutoring with this I am so lost. Do you kno of anyone that tutors in Florida?

 

 

Solution Description

 

E 17-19 Record pension expense, funding, and gains and losses; determine account balances

 

 

 

Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2011 (the end of Beale’s fiscal year), the following pension-related data were available:

 

 

 

 

Projected Benefit Obligation

 

 

($in millions)

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1, 2011

 

 

$480

 

 

 

 

Service cost

 

 

82

 

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