Exercise 17-10 (Algo) Determine pension expense [LO17-6, 17-7]Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2021, Abbott and Abbott received thefollowing information:Projected Benefit ObligationBalance, January 1Service cost($ in millions)$12522Interest cost15Benefits paid(8)Balance, December 31$154Plan AssetsBalance, January 1Actual return on plan assets$7510Contributions 202122Benefits paid|(8)Balance, December 31$99The expected long-term rate of return on plan assets was 12%. There was no prior service cost and a negligible net loss-AOCI onJanuary 1, 2021.Required:1. Determine Abbott and Abbott's pension expense for 2021.2 Prenare the iournal entries to record Abbott ancd Abbott's a) pension expense (6) fundina and (c) pavment for 2021

Pension expense amount is the sum of current expense, past service cost and interest amount on…

Answered: Exercise 17-10 (Algo) Determine pension…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 4E

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Exercise 17-10 (Algo) Determine pension expense [LO17-6, 17-7] Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2021, Abbott and Abbott recei following information: Projected Benefit Obligation Balance, January 1 ($ in millions) $125 Service cost Interest cost 22 Benefits paid 15 (8) Balance, December 31 $154 Plan Assets Balance, January 1 Actual return on plan assets Contributions 2021 Benefits paid $75 10 22 (8) Balance, December 31 $99 The expected long-term rate of return on plan assets was 12%. There was no prior service cost and a negligible net loss-A January 1, 2021. Required: 1. Determine Abbott and Abbott's pension expense for 2021. 2. Prepare the journal entries to record Abbott and Abbott's (a) pension expense, (b) funding, and (c) payment for 2021.
1. Compute 2022 net periodic pension expense. The 2022 records of MPS Company provided the following data related to its noncontributory, defined benefit pension plan (amounts in PO00s): a. Accumulated benefit obligation (report of actuary) Beginning balance P3,000 Service cost 1,200 Interest cost 240 Pension benefits paid Ending balance (400) P4,040 Discount rate used by actuary, 8% b. Plan assets at fair value (report of trustee): Beginning balance Actual return on plan assets Contributions P2,400 168 1,016 (400) Pension benefits paid Ending balance Р3,192 Expected long-term rate of return of plan assets, 7% c. January 1, 2022, balance of unrecognized prior service cost, gains and losses, and transaction cost, zero.
Computing Pension Expense, Gain/Loss Amortization, PBO, and Plan Asset Balances The following data relate to a defined benefit pension plan for Hollistir Co. Fair value of plan assets, Jan. 1, 2020 $9,600 PBO Jan. 1, 2020, not including any items below 12,000 PSC from amendment dated Jan. 1, 2020, (10 years is the amortization period) 6,000 Gain from change in actuarial assumptions, computed as of Jan. 1, 2020 1,800 Actual return on plan assets, 2020 1,200 Contributions to plan assets in 2020 2,400 Benefits paid to retirees in 2020 3,000 Service cost for 2020 5,400 Discount rate 8% Expected rate of return on plan assets 10% Required a. Compute pension expense for 2020. Hollistir amortizes the full pension gain/loss over average service life of 15 years, using the straight-line method. Pension expense, 2020 b. Compute PBO at December 31, 2020. PBO, Dec. 31, 2020 c. Compute fair value of plan assets at December 31, 2020. Fair…
rane importers provides the following pension plan Fair value of pension plan assets, January 1, 2025 Fair value of pension plan assets, December 31, 2025 Contributions to the plan in 2025 Benefits paid retirees in 2025 Tormation. Actual return on plan assets for 2025 $ $2,575,000 2,914,000 299,000 366,000 From the data above, compute the actual return on the plan assets for 2025.
NOTE 17: EMPLOYEE BENEFIT PLANS (in part) ($ in millions) Changes in projected benefit obligation: Obligation at beginning of period Service cost Interest cost Pension Benefits 2020 2019 $ 648 1 $ 637 1 31 34 Actuarial (gain) loss Benefits paid Obligation at end of period Change in plan assets: 54 37 (50) (50) $ 684 $ 659 Fair value of plan assets at beginning of period Actual return (loss) on plan assets* $ 496 $ 431 70 52 Employer contribution 24 74 Benefits paid (50) (50) Fair value of plan assets at end of period 540 507 Net liability recognized at end of period $ (144) $ (152) *Expected return $30 and $29 in 2020 and 2019, respectively Required: 1. What amount did Maur report in its balance sheet related to the pension plan at June 30, 2020? 2. When calculating pension expense at June 30, Maur included $10 million in its income statement as the amortization of unrecognized net actuarial loss (net loss-AOCI). This AOCI account had a balance of $350 million at the beginning of the…
Following information is relevant to a defined benefit pension plan of PT XYZ for the year 2020: Plant Assets Balance at January 01, 2020 Expected return on plan assets 600 61 Contribution received 49 Benefits paid Actuarial gain (balancing figure) -40 15 685 Plant Liabilities: Balance at January 01, 2020 640 Interest cost 52 Current Service Cost 21 Benefit paid Actuarial gain (loss) (balancing figure) -40 42 715 Calculate: (i) Pension expense to be recognised in profit or loss for the year ended December 31, 2020. (ii) Net liabilities to be shown in the Statement of Financial Position as of December 31, 2020
Determine the missing amounts in the 2020 pension worksheet, indicating whether the amounts are debits or credits. (Enter all amounts as positive.) Pension Worksheet—Riverbed Inc. General Journal Entries Memo Record Annual PensionExpense Cash OCI—PriorService Cost OCI—Gain/Loss Pension Asset/Liability Projected BenefitObligation PlanAssets Balance, Jan. 1, 2020 $1,298 Cr. $3,304 $2,006 Service cost $ 590 Interest cost 330…
Current Attempt in Progress Cullumber Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2025, the following balances relate to this plan. Plan assets Projected benefit obligation Pension asset/liability Accumulated OCI (PSC) $465,800 604,200 138,400 95,000 Dr. As a result of the operation of the plan during 2025, the following additional data are provided by the actuary. (a) Service cost Settlement rate, 10% Actual return on plan assets Amortization of prior service cost Expected return on plan assets Unexpected loss from change in projected benefit obligation, due to change in actuarial predictions Contributions Benefits paid retirees $86,600 55,000 19,300 52,000 79,600 102,800 88,300 Using the data above, compute pension expense for Cullumber. for the year 2025 by preparing a pension worksheet. (Enter all amounts as positive)
Determining Pension Expense The following information pertains to Qdobe Corporation’s defined benefit pension plan for 2020. Service cost $512,000 Actual and expected gain on plan assets 112,000 Actuarial loss on PBO incurred during 2020 128,000 Amortization of unrecognized prior service cost 16,000 Annual interest on pension obligation 160,000 What amount should Qdobe report as pension expense in its 2020 income statement? Assume no beginning balance in Accumulated OCI—Pension Gain/Loss. Pension expense, 2020
The following pension-related data pertain to Metro Recreation's noncontributory, defined benefit pension plan for 2021: Projected benefit obligation Accumulated benefit obligation Plan assets (fair value) Interest (discount) rate, 8 Expected return on plan assets, 10% Prior service cost-AOCI (from Dec. 31, 2020, amendment) ($ in 000s) Jan. 1 $5,500 3,785 6,630 Dec. 31 $5,780 4,090 7,075 980 683 Net loss-AOCI Average remaining service life: 10 years Gain due to changes in actuarial assumptions Contributions to pension fund (end of year) Pension benefits paid (end of year) 66 480 435 Required: Prepare a pension spreadsheet that shows the relationships among the various pension balances, shows the changes in those balances, and computes pension expense for 2021. (Enter credit amounts with a minus sign and debit amounts with a positive sign. Enter your answers in thousands (i.e. 200,000 should be entered as 200).) Net Pension Pension Prior Service Cost-AOCI Net Loss- AOCI (Liability)/…
The following pension-related data pertain to Metro Recreation's noncontributory, defined benefit pension plan for 2021: Projected benefit obligation Accumulated benefit obligation Plan assets (fair value) Interest (discount) rate, 8% Expected return on plan assets, 108 Prior service cost-AOCI (from Dec. 31, 2020, amendment) ($ in 000s) Jan. 1 $5,500 3,785 6,630 Dec. 31 $5,780 4,090 7,075 980 683 Net loss-AOCI Average remaining service life: 10 years Gain due to changes in actuarial assumptions Contributions to pension fund (end of year) Pension benefits paid (end of year) 6 480 435 Required: Prepare a pension spreadsheet that shows the relationships among the various pension balances, shows the changes in those balances, and computes pension expense for 2021. (Enter credit amounts with a minus slgn and debit amounts with a positive sign. Enter your answers in thousands (i.e. 200,000 should be entered as 200).) Net Pension Prior Service Cost-AOCI Net Loss- AOCI Pension Expense…
BANTRY Company reported the following in its 2021 annual report with respect to retirement benefit obligations (i.e., Pension Obligations) Interest Revenue on Plan Assets Service Cost Interest on Defined Benefit Obligations QUESTION ONE: MCQ 3 What is BANTRY Company's Pension Expense for 2021? A. $100,000 B. $700,000 C. $300,000 D. $500,000 E. None of these answers $600,000 $300,000 $400,000 THE FOLLOWING INFORMATION RELATES TO MCQ 4 QUESTION ONE: MCQ 4 Suppose KINSALE Company had Pension Plan Assets on 1 January 2021 of $4,000,000 and Pension Plan Assets on 31 December 2021 of $6,000,000. Assume that the 2021 Contributions to the Pension Fund were $3,400,000 while the Benefits Paid from the Pension Fund were $4,600,000. What was KINSALE Company's return on Plan Assets for 2021? A. $2,700,000 B. $2,900,000 C. $3,100,000 D. $3,200,000 E. None of these answers

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