Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Chapter 10, Problem 18E
To determine
Explain the meaning of $5,955 million unfunded pension liability and $432 million periodic pension cost.
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In a recent year’s financial statements, Procter & Gamble showed an unfunded pension liability of $5,599 million and a periodic pension cost of $434 million.Explain the meaning of the $5,599 million unfunded pension liability and the$434 million periodic pension cost.
Horizon Inc. has a defined benefit pension plan. The following pension-related data were available for the current calendar year:
PBO: Balance, Jan. 1 $ 235,000 Service cost 36,000 Interest cost (5% discount rate) 11,750 Gain from changes in actuarial assumptions in 2021 (4,500 )Benefits paid to retirees (15,000 )Balance, Dec. 31 $ 263,250 Plan assets: Balance, Jan.1 $ 245,000 Actual return (expected return was $22,000) 20,000 Contributions 30,000 Benefits paid (15,000 )Balance, Dec. 31 $ 280,000 ABO, Dec. 31 $ 239,500 January 1, 2021, balances: Prior service cost–AOCI (amortization $5,075/yr.) 5,075 Net gain–AOCI (amortization, if any, over 15 years) 50,750
There were no other relevant data.
Required:1. Calculate the 2021 pension expense.2. Prepare the 2021 journal entries to record pension expense and funding.3. Prepare any journal entries to record any 2021 gains or losses.
The following information is related to the defined benefit pension plan of Avalanche Corporation for the year:
Service cost
$
62,000
Contributions to pension plan
118,000
Benefits paid to retirees
156,000
Plan assets (fair value), January 1
641,000
Plan assets (fair value), December 31
758,000
Actual return on plan assets
155,000
PBO, January 1
925,000
PBO, December 31
923,500
Discount rate
10
%
Long-term expected return on plan assets
9
%
Assuming no other relevant data exist, what is the pension expense for the year?
Multiple Choice
$62,000.
$89,810.
$96,810.
$154,500.
Chapter 10 Solutions
Financial And Managerial Accounting
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