Determine lacy pension expense

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Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2013, Lacy received the following information:

Projected Benefit Obligation ($ in millions)
Balance, January 1 $ 500
Service cost 74
Interest cost (5%) 25
Benefits paid (72 )

Balance, December 31 $ 527

Plan Assets ($ in millions)
Balance, January 1 $ 370
Actual return on plan assets 42
Contributions 2013 74
Benefits paid (72 )

Balance, December 31 $ 414


The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2013. At the end of 2013, Lacy amended the pension formula creating a prior service cost of $26 million.

Required:
1. Determine Lacy's pension expense for 2013.
2. Prepare the journal entry(s) to record Lacy's pension expense, gains or losses, prior service cost, funding, and payment of retiree benefits for 2013.

Reference no: EM13281467

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