The Kollar Company has a defined benefit pension plan. Pension information conce

Question

The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2016 and 2017 are presented below ($ in millions):

Prior service cost from plan amendment on January 2, 2016 = $850 (straight-line amortization for 10-year average remaining service period).

Required.

1, Calculate pension expense for 2016 and 2017.

2. Prepare the journal entries for 2016 and 2017 to record pension expense

3. Prepare the journal entries for 2016 and 2017 to record any gains and losses and new prior service cost.

4. Prepare the journal entries for 2016 and 2017 to record the cash contribution to plan assets and benefit payments to retirees.

The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2016 and 2017 are presented below ($ in millions):

Explanation / Answer

1 ) Pension Expenses to be booked in year 2016 & 2017 All amount in $ 2016 2017 Items Annual Pension Expense Annual Pension Expense Service Cost 690 740 Expected Return -336 -461 Interest Cost 395 478 Aort. PSC 85 85 Contributions Benefit Paid Expenses to be booked 834 842 * Assuming contribution to Asset at the end of the year, therefore interest is not calculated on the same. 2016 2017 Debit Credit Debit Credit Pension Exp            834            842 To Pension Liab            834            842

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