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Actuary and trustee reports indicate the following changes in the PBO and plan assets of Douglas-Roberts Industries during 2021: Prior service cost at Jan. 1, 2021, from plan amendment at the beginning of 2018 (amortization: $2 million per year) $ 14 million Net loss-AOCI at Jan.1, 2021 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate $210 million 10 years 7% ($ in millions) Plan Assets PBO $ 700 $ 500 Beginning of 2021 Service cost 64 Beginning of 2021 Return on plan assets, 8% (10% expected) 40 49 Interest cost, 7% Loss (gain) on PBO Less: Retiree benefits (16) Cash contributions 103 (37) Less: Retiree benefits (37) End of 2021 $ 760 End of 2021 $ 606 Required: 1-a. Determine Douglas-Roberts's pension expense for 2021. 1-b, 2. to 4. Prepare the appropriate journal entries to record the pension expense, to record any 2021 gains and losses, to record the cash contribution to plan assets and to record retiree benefits.

Actuary and trustee reports indicate the following changes in the PBO and plan assets of Douglas-Roberts Industries during 2021: Prior service cost at Jan. 1, 2021, from plan amendment at the beginning of 2018 (amortization: $2 million per year) $ 14 million Net loss-AOCI at Jan.1, 2021 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate $210 million 10 years 7% ($ in millions) Plan Assets PBO $ 700 $ 500 Beginning of 2021 Service cost 64 Beginning of 2021 Return on plan assets, 8% (10% expected) 40 49 Interest cost, 7% Loss (gain) on PBO Less: Retiree benefits (16) Cash contributions 103 (37) Less: Retiree benefits (37) End of 2021 $ 760 End of 2021 $ 606 Required: 1-a. Determine Douglas-Roberts's pension expense for 2021. 1-b, 2. to 4. Prepare the appropriate journal entries to record the pension expense, to record any 2021 gains and losses, to record the cash contribution to plan assets and to record retiree benefits.

Intermediate Accounting: Reporting And Analysis
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
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Actuary and trustee reports indicate the following changes in the PBO and plan assets of Douglas-Roberts Industries during 2021: Prior service cost at Jan. 1, 2021, from plan amendment at the beginning of 2018 (amortization: $2 million per year) $ 14 million Net loss-AOCI at Jan.1, 2021 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate $210 million 10 years 7% ($ in millions) Plan Assets PBO $ 700 Beginning of 2021 Service cost 64 Beginning of 2021 Return on plan assets, 8% (10% expected) Interest cost, 7% 49 (16) Cash contributions Loss (gain) on PBO Less: Retiree benefits (37) Less: Retiree benefits End of 2021 $ 760 End of 2021 $ 606 Required: 1-a. Determine Douglas-Roberts's pension expense for 2021. 1-b, 2. to 4. Prepare the appropriate journal entries to record the pension expense, to record any 2021 gains and losses, to record the cash contribution to plan assets and to record retiree benefits. $ 500 40 103 (37)
Transcribed Image Text:Actuary and trustee reports indicate the following changes in the PBO and plan assets of Douglas-Roberts Industries during 2021: Prior service cost at Jan. 1, 2021, from plan amendment at the beginning of 2018 (amortization: $2 million per year) $ 14 million Net loss-AOCI at Jan.1, 2021 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate $210 million 10 years 7% ($ in millions) Plan Assets PBO $ 700 Beginning of 2021 Service cost 64 Beginning of 2021 Return on plan assets, 8% (10% expected) Interest cost, 7% 49 (16) Cash contributions Loss (gain) on PBO Less: Retiree benefits (37) Less: Retiree benefits End of 2021 $ 760 End of 2021 $ 606 Required: 1-a. Determine Douglas-Roberts's pension expense for 2021. 1-b, 2. to 4. Prepare the appropriate journal entries to record the pension expense, to record any 2021 gains and losses, to record the cash contribution to plan assets and to record retiree benefits. $ 500 40 103 (37)
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