Actuary and trustee reports indicate the following changes in the PBO and plan assets of Douglas-Roberts Industries during 2021. Prior service cost at Jan. 1, 2021, from plan amendment at the $21 million beginning of 2018 (amortization: $3 million per year) Net loss –ADCI at Jan. 1, 2021 (previous losses exceeded previous gains) $220 million Average remaining service life of the active employee group 10 years Actuary’s discount rate 7% ($ in millions) Plan PBO Assets Beginning of 2021 $800 Beginning of 2021 $600 Service Cost 60 Return on plan assets, 48 8% (10% expected) Interest cost, 7% 56 Loss (gain) on PBO (17) Cash contributions 104 Less: Retiree benefits (38) Less: Retiree benefits (38) End of 2021 $867 End of 2021 $714 Required: 1-a. Determine Douglas-Roberts pension expense for 2021. 1-b, 2 to 4. Prepare the appropriate journal entries to record the pension expense, to record any 2021 gains and losses, to record the cash contributions to plan assets and to record retiree benefits.
Actuary and trustee reports indicate the following changes in the PBO and plan assets of Douglas-Roberts Industries during 2021.
Prior service cost at Jan. 1, 2021, from plan amendment at the $21 million
beginning of 2018 (amortization: $3 million per year)
Net loss –ADCI at Jan. 1, 2021 (previous losses exceeded previous gains) $220 million
Average remaining service life of the active employee group 10 years
Actuary’s discount rate 7%
($ in millions) Plan
PBO Assets
Beginning of 2021 $800 Beginning of 2021 $600
Service Cost 60 Return on plan assets, 48
8% (10% expected)
Interest cost, 7% 56
Loss (gain) on PBO (17) Cash contributions 104
Less: Retiree benefits (38) Less: Retiree benefits (38)
End of 2021 $867 End of 2021 $714
Required:
1-a. Determine Douglas-Roberts pension expense for 2021.
1-b, 2 to 4. Prepare the appropriate
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
