Reference no: EM132727546
Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2021 (the end of Beale's fiscal year), the following pension-related data were available:
Projected Benefit Obligation($ in millions)
Balance, January 1, 2021 $640
Service cost 66
Interest cost, discount rate, 5% 32
Gain due to changes in actuarial assumptions in 2021 (16)
Pension benefits paid (32)
Balance, December 31, 2021 $690
Plan Assets($ in millions)
Balance, January 1, 2021 $660
Actual return on plan assets 42 (Expected return on plan assets, $47)
Cash contributions 83
Pension benefits paid (32)
Balance, December 31, 2021 $753
January 1, 2021, balances:
($ in millions)Pension asset$20
Prior service cost-AOCI (amortization $4 per year) 20
Net gain-AOCI (any amortization over 10 years) 106
Required:
Problem 1: Prepare the 2021 journal entries to record pension expense, to record any 2021 gains and losses and the contribution to plan assets and benefit payments to retirees.
Problem 2: Determine the balances at December 31, 2021, in the PBO, plan assets, the net gain-AOCI, and prior service cost-AOCI [Hint: You might find T-accounts useful.]
Problem 3: What amount will Beale report in its 2021 balance sheet as a net pension asset or net pension liability for the funded status of the plan?
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