Problem 17-12 (Algo) Determine pension expense; journal entries; two years [LO17-3, 17-4, 17-5, 17-6, 17- 7, 17-8] The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2024 and 2025 are presented below ($ in millions): Information Provided by Pension Plan Actuary: a. Projected benefit obligation as of December 31, 2023 = $2,150. b. Prior service cost from plan amendment on January 2, 2024 = $650 (straight-line amortization for 10-year average remaining service period). c. Service cost for 2024 = $570. d. Service cost for 2025 = $620. e. Discount rate used by actuary on projected benefit obligation for 2024 and 2025 = 10%. f. Payments to retirees in 2024 = $430. g. Payments to retirees in 2025 = $500. h. No changes in actuarial assumptions or estimates. i. Net gain-AOCI on January 1, 2024 = $255. j. Net gains and losses are amortized for 10 years in 2024 and 2025. Information Provided by Pension Fund Trustee: a. Plan asset balance at fair value on January 1, 2024 = $1,600. b. 2024 contributions = $590. c. 2025 contributions = $640. d. Expected long-term rate of return on plan assets = 12%. e. 2024 actual return on plan assets = $140. f. 2025 actual return on plan assets = $190. Required: 1. Calculate pension expense for 2024 and 2025.
Problem 17-12 (Algo) Determine pension expense; journal entries; two years [LO17-3, 17-4, 17-5, 17-6, 17- 7, 17-8] The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2024 and 2025 are presented below ($ in millions): Information Provided by Pension Plan Actuary: a. Projected benefit obligation as of December 31, 2023 = $2,150. b. Prior service cost from plan amendment on January 2, 2024 = $650 (straight-line amortization for 10-year average remaining service period). c. Service cost for 2024 = $570. d. Service cost for 2025 = $620. e. Discount rate used by actuary on projected benefit obligation for 2024 and 2025 = 10%. f. Payments to retirees in 2024 = $430. g. Payments to retirees in 2025 = $500. h. No changes in actuarial assumptions or estimates. i. Net gain-AOCI on January 1, 2024 = $255. j. Net gains and losses are amortized for 10 years in 2024 and 2025. Information Provided by Pension Fund Trustee: a. Plan asset balance at fair value on January 1, 2024 = $1,600. b. 2024 contributions = $590. c. 2025 contributions = $640. d. Expected long-term rate of return on plan assets = 12%. e. 2024 actual return on plan assets = $140. f. 2025 actual return on plan assets = $190. Required: 1. Calculate pension expense for 2024 and 2025.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter19: Accounting For Post Retirement Benefits
Section: Chapter Questions
Problem 4E
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![Problem 17-12 (Algo) Determine pension expense; journal entries; two years [LO17-3, 17-4, 17-5, 17-6, 17-
7,17-8]
The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2024 and 2025 are
presented below ($ in millions):
Information Provided by Pension Plan Actuary:
a. Projected benefit obligation as of December 31, 2023 = $2,150.
b. Prior service cost from plan amendment on January 2, 2024 = $650 (straight-line amortization for 10-year average remaining service
period).
c. Service cost for 2024 = $570.
d. Service cost for 2025 = $620.
e. Discount rate used by actuary on projected benefit obligation for 2024 and 2025 = 10%.
f. Payments to retirees in 2024 = $430.
g. Payments to retirees in 2025 = $500.
h. No changes in actuarial assumptions or estimates.
i. Net gain—AOCI on January 1, 2024 = $255.
j. Net gains and losses are amortized for 10 years in 2024 and 2025.
Information Provided by Pension Fund Trustee:
a. Plan asset balance at fair value on January 1, 2024 = $1,600.
b. 2024 contributions = $590.
c. 2025 contributions = $640.
d. Expected long-term rate of return on plan assets = 12%.
e. 2024 actual return on plan assets = $140.
f. 2025 actual return on plan assets = $190.
Required:
1. Calculate pension expense for 2024 and 2025.
re
Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Required 1
equi
CITT
Calculate pension expense for 2024 and 2025.
Note: Amounts to be deducted should be indicated with a minus sign. Do not round intermediate calculations. Enter your
answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).
Service cost
Interest on PBO
Expected return
Amortization of prior service cost
Amortization of net gain
Pension expense
($ in millions)
2024
2025
$
570.0 $
280.0
(192.0)
65.0
620.0
327.0 ×
(228.0)
65.0
(4.0)
(8.5)
$
719.0
$
775.5](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb1df83bb-7fec-49a0-9789-38420e065d59%2F36f6a3ec-928a-47aa-b6ac-20d0e7029c4b%2F33c5s6j_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 17-12 (Algo) Determine pension expense; journal entries; two years [LO17-3, 17-4, 17-5, 17-6, 17-
7,17-8]
The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2024 and 2025 are
presented below ($ in millions):
Information Provided by Pension Plan Actuary:
a. Projected benefit obligation as of December 31, 2023 = $2,150.
b. Prior service cost from plan amendment on January 2, 2024 = $650 (straight-line amortization for 10-year average remaining service
period).
c. Service cost for 2024 = $570.
d. Service cost for 2025 = $620.
e. Discount rate used by actuary on projected benefit obligation for 2024 and 2025 = 10%.
f. Payments to retirees in 2024 = $430.
g. Payments to retirees in 2025 = $500.
h. No changes in actuarial assumptions or estimates.
i. Net gain—AOCI on January 1, 2024 = $255.
j. Net gains and losses are amortized for 10 years in 2024 and 2025.
Information Provided by Pension Fund Trustee:
a. Plan asset balance at fair value on January 1, 2024 = $1,600.
b. 2024 contributions = $590.
c. 2025 contributions = $640.
d. Expected long-term rate of return on plan assets = 12%.
e. 2024 actual return on plan assets = $140.
f. 2025 actual return on plan assets = $190.
Required:
1. Calculate pension expense for 2024 and 2025.
re
Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Required 1
equi
CITT
Calculate pension expense for 2024 and 2025.
Note: Amounts to be deducted should be indicated with a minus sign. Do not round intermediate calculations. Enter your
answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).
Service cost
Interest on PBO
Expected return
Amortization of prior service cost
Amortization of net gain
Pension expense
($ in millions)
2024
2025
$
570.0 $
280.0
(192.0)
65.0
620.0
327.0 ×
(228.0)
65.0
(4.0)
(8.5)
$
719.0
$
775.5
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