Scribners Scribners Scribners A partially completed pension spreadsheet showing

Question

Scribners Scribners Scribners A partially completed pension spreadsheet showing the relationships among the elements that comprise the defined benefit pension plan of Universal Products is given below. The actuary's discount rate is 5%. At the end of 2016, the pension formula was amended, creating a prior service cost of $100,000. The expected rate of return on assets was 8%, and the average remaining service life of the active employee group is 20 years in the current year as well as the previous two years Required Fill in the missing amounts. (Enter credit amounts with a minus sign and debit amounts with a positive sign.) Liability) AOCIAOCI Jan. 1, 2018 S (700) 400 $ 95 S 70 86 (35 (43) Next >

Explanation / Answer

( )s indicate credits; debits otherwise ($ in 000s) PBO Plan Assets Prior Service Cost Net Loss Pension Expense Cash Net Pension (Liability) / Asset –AOCI –AOCI Balance, Jan. 1, 2018 -700 400 95 70 -300 Service cost -86 86 -86 Interest cost, 5% -35 35 -35 Expected return on assets 43 -43 43 Adjust for: Loss on assets -7 7 -7 Amortization of: Prior service cost -5 5 Net loss 0 0 Gain on PBO 10 -10 10 Prior service cost 0 0 0 Cash funding 70 -70 70 Retiree benefits 150 -150 Bal., Dec. 31, 2018 -661 356 90 67 83 -305 Note: Prior service cost amortization = 95-90 = 5 Retiree benefits is balancing figure -700-86-35+10+661 = 150

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