INTERMEDIATE ACCOUNTING V1 330 6/16 >C
8th Edition
ISBN: 9781260014853
Author: SPICELAND
Publisher: MCG CUSTOM
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Question
Chapter 17, Problem 17.9P
(1)
To determine
Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.
To determine: Pension expense at the end of 2018
(2)
To determine
Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.
To determine: PBO at the end of 2018
(3)
To determine
Plan assets: The assets which are used to satisfy the postretirement obligation, are held as a pension fund by the trustee, to invest the employer contributions,
To determine: The pension plan assets at the end of 2018
(4)
To determine
Net pension asset or net pension liability: The net total of PBO and pension plan assets are reported as net pension asset or net pension liability. Net pension asset is reported, if the net balance is a debit. Net pension liability is reported, if the net balance is a credit.
To determine: The net pension asset (liability) at the end of 2018
(5)
To determine
Debit and credit rules:
- Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in
stockholders’ equity accounts. - Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.
To journalize: Entries related to net pension expense, funding, and retiree benefits paid in 2018
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*CMOU CD A1D 17 nz inn 1IDid =ın in
PBO balance, January 1
Plan assets balance, January 1
Service Cost
Interest cost
Gain from change in actuarial assumption
Benefits paid
Actual return on plan assets
Contributions 2021
$480
300
75
45
22
(36)
20
60
The expected long-term rate of return on plan assets was 8%. There were no AOCI balances related to pensions on January 1, 2021,
but at the end of 2021, the company amended the pension formula, creating a prior service cost of $12 million.
Required:
1. Calculate the pension expense for 2021.
2. Prepare the journal entries to record (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding,
and (e) payment of benefits for 2021.
3. What amount will Electronic Distribution report in its 2021 balance sheet as a net pension asset or net pension liability?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Required 3
Calculate the pension expense for 2021. (Enter your answer in…
Current Attempt in Progress
The actuary for the pension plan of Bridgeport Inc. calculated the following net gains and losses.
Incurred during the Year
2020
2021
2022
2023
As of January 1,
Other information about the company's pension obligation and plan assets is as follows.
2020
2021
2022
2023
2020
2021
2022
2023
Projected Benefit
Obligation
Save for Later
(Gain) or Loss
$298,100
478,900
$
(210,400)
(288,600)
Year Minimum Amortization of (Gain) Loss
$
Bridgeport Inc. has a stable labor force of 400 employees who are expected to receive benefits under the plan. The total service-years
for all participating employees is 4,800. The beginning balance of accumulated OCI (G/L) is zero on January 1, 2020. The market-
related value and the fair value of plan assets are the same for the 4-year period. Use the average remaining service life per employee
as the basis for amortization.
$
Compute the minimum amount of accumulated OCI (G/L) amortized as a component of net periodic pension expense…
Projected Benefit Obligation
Balance, January 1, 2024
Service cost
Interest cost, discount rate, 5%
Gain due to changes in actuarial assumptions in 2024
Pension benefits paid
Balance, December 31, 2024
Plan Assets
Balance, January 1, 2024
Actual return on plan assets
(Expected return on plan assets, $49)
Cash contributions
Pension benefits paid
Balance, December 31, 2024
January 1, 2024, balances:
Pension asset
($ in millions)
$ 680
70
34
(18)
(34)
$ 732
($ in millions)
$ 740
44
85
(34)
$ 835
($ in millions)
$ 60
30
124
Prior service cost-AOCI (amortization $6 per year)
Net gain-AOCI (any amortization over 10 years)
Required:
Prepare a pension spreadsheet to show the relationship among the PBO, plan assets, prior service cost, the net gain, pension
expense, and the net pension asset.
Chapter 17 Solutions
INTERMEDIATE ACCOUNTING V1 330 6/16 >C
Ch. 17 - Prob. 17.1QCh. 17 - Prob. 17.2QCh. 17 - Prob. 17.3QCh. 17 - What is the vested benefit obligation?Ch. 17 - Prob. 17.5QCh. 17 - Prob. 17.6QCh. 17 - Name three events that might change the balance of...Ch. 17 - Prob. 17.8QCh. 17 - Prob. 17.9QCh. 17 - Prob. 17.10Q
Ch. 17 - The return on plan assets is the increase in plan...Ch. 17 - Define prior service cost. How is it reported in...Ch. 17 - Prob. 17.13QCh. 17 - Is a companys PBO reported in the balance sheet?...Ch. 17 - What two components of pension expense may be...Ch. 17 - Prob. 17.16QCh. 17 - Evaluate this statement: The excess of the actual...Ch. 17 - Prob. 17.18QCh. 17 - TFC Inc. revises its estimate of future salary...Ch. 17 - Prob. 17.20QCh. 17 - Prob. 17.21QCh. 17 - Prob. 17.22QCh. 17 - The components of postretirement benefit expense...Ch. 17 - The EPBO for Branch Industries at the end of 2018...Ch. 17 - Prob. 17.25QCh. 17 - Prob. 17.26QCh. 17 - Prob. 17.1BECh. 17 - Prob. 17.2BECh. 17 - Prob. 17.3BECh. 17 - Prob. 17.4BECh. 17 - Prob. 17.5BECh. 17 - Prob. 17.6BECh. 17 - Prob. 17.7BECh. 17 - Prob. 17.8BECh. 17 - Prob. 17.9BECh. 17 - Prob. 17.10BECh. 17 - Net gain LO176 The projected benefit obligation...Ch. 17 - Prob. 17.12BECh. 17 - Prob. 17.13BECh. 17 - Postretirement benefits; determine the APBO and...Ch. 17 - Prob. 17.15BECh. 17 - Prob. 17.1ECh. 17 - Prob. 17.2ECh. 17 - Prob. 17.3ECh. 17 - Prob. 17.4ECh. 17 - Prob. 17.5ECh. 17 - Prob. 17.6ECh. 17 - Prob. 17.7ECh. 17 - Prob. 17.8ECh. 17 - Prob. 17.9ECh. 17 - Prob. 17.10ECh. 17 - Prob. 17.11ECh. 17 - PBO calculations; ABO calculations; present value...Ch. 17 - Prob. 17.13ECh. 17 - Prob. 17.14ECh. 17 - Prob. 17.15ECh. 17 - Prob. 17.16ECh. 17 - Prob. 17.17ECh. 17 - Prob. 17.18ECh. 17 - Prob. 17.19ECh. 17 - Prob. 17.20ECh. 17 - Prob. 17.21ECh. 17 - Prob. 17.22ECh. 17 - Prob. 17.23ECh. 17 - Prob. 17.24ECh. 17 - Prob. 17.25ECh. 17 - Prob. 17.26ECh. 17 - Prob. 17.27ECh. 17 - Prob. 17.28ECh. 17 - Prob. 17.29ECh. 17 - Prob. 17.30ECh. 17 - Prob. 17.31ECh. 17 - Prob. 17.32ECh. 17 - Prob. 17.33ECh. 17 - Prob. 17.1PCh. 17 - PBO calculations; present value concepts LO173...Ch. 17 - Service cost, interest, and PBO calculations;...Ch. 17 - Prob. 17.4PCh. 17 - Prob. 17.5PCh. 17 - Prob. 17.6PCh. 17 - Determining the amortization of net gain LO176...Ch. 17 - Prob. 17.8PCh. 17 - Prob. 17.9PCh. 17 - Prob. 17.10PCh. 17 - Prob. 17.11PCh. 17 - Prob. 17.12PCh. 17 - Prob. 17.13PCh. 17 - Prob. 17.14PCh. 17 - Prob. 17.15PCh. 17 - Prob. 17.16PCh. 17 - Prob. 17.17PCh. 17 - Prob. 17.18PCh. 17 - Prob. 17.19PCh. 17 - Prob. 17.20PCh. 17 - Prob. 17.21PCh. 17 - Prob. 17.1BYPCh. 17 - Prob. 17.2BYPCh. 17 - Prob. 17.3BYPCh. 17 - Prob. 17.5BYPCh. 17 - Prob. 17.6BYPCh. 17 - Prob. 17.7BYPCh. 17 - Prob. 17.8BYPCh. 17 - Prob. 17.9BYPCh. 17 - Prob. 17.11BYPCh. 17 - Prob. 1CCTCCh. 17 - Prob. 1CCIFRS
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