Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2024 are as follows: 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 2024 ($ millions) $600 300 85 65 28 (60) 13 75 The expected long-term rate of return on plan assets was 6%. There were no AOCI balances related to pensions on January 1, 2024, but at the end of 2024, the company amended the pension formula, creating a prior service cost of $16 million. Required: 1. Calculate the pension expense for 2024. 2. Prepare the journal entries to record (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e) payment of benefits for 2024. 3. What amount will Electronic Distribution report in its 2024 balance sheet as a net pension asset or net pension liability? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the pension expense for 2024. Note: Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Service cost Interest cost Pension Expense Expected return on plan assets Amortization of prior service cost Amortization of net gain or net loss-AOCI Pension expense
Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2024 are as follows: PBO balance, January 1 Plan assets balance, January 1 Service cost Interest cost Gain from change in actuarial assumption Benefits paid Actual return on plan assets Contributions 2024 ($ millions) $600 300 85 65 28 (60) 13 75 The expected long-term rate of return on plan assets was 6%. There were no AOCI balances related to pensions on January 1, 2024, but at the end of 2024, the company amended the pension formula, creating a prior service cost of $16 million. Required: 1. Calculate the pension expense for 2024. 2. Prepare the journal entries to record (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e) payment of benefits for 2024. 3. What amount will Electronic Distribution report in its 2024 balance sheet as a net pension asset or net pension liability? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the pension expense for 2024. Note: Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Service cost Interest cost Pension Expense Expected return on plan assets Amortization of prior service cost Amortization of net gain or net loss-AOCI Pension expense
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2024 are as follows:
PBO balance, January 1
Plan assets balance, January 1
Service cost
Interest cost
Gain from change in actuarial assumption
Benefits paid
Actual return on plan assets
Contributions 2024
($ millions)
$600
300
85
65
28
(60)
13
75
The expected long-term rate of return on plan assets was 6%. There were no AOCI balances related to pensions on January 1, 2024,
but at the end of 2024, the company amended the pension formula, creating a prior service cost of $16 million.
Required:
1. Calculate the pension expense for 2024.
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 2024.
3. What amount will Electronic Distribution report in its 2024 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 2024.
Note: Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should
be entered as 10).
Service cost
Interest cost
Pension Expense
Expected return on plan assets
Amortization of prior service cost
Amortization of net gain or net loss-AOCI
Pension expense
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