Pepeise an Tundng, new gains and losses (L017-7, 17-8 A partally completed pensi

Question

Pepeise an Tundng, new gains and losses (L017-7, 17-8 A partally completed pension spreadsheet showting the relationships among the Camey, Inc.'s defined beneft pension plan follows Stx years ea and recalculated service cost created by the recalculation is being amortized at the rate of $7 milion per year. At the end o 2016, the pension formula expected rate of return on assets and the achary's discount rate were 10%, and the average remaining elemenits that constute using the more generous formula. The prior $45 miltion. The ser, Camey revised its pension formula earned by employees in prior years was amended again, creating an additional prior service cost of service Iife of the active employee group is 10 years (Enter your answers in millions ti.e., 10,000,000 should be entered as 10 Required: Fil inthe missng amounts. (Amounts to be deducted should be indicated with a minus sign) debits otherwise Net Pension PBO Plan Assets Cost-AOCI Prior Service Net Loss Pension AOCI Cash (Liability Balance, Jan. 1,2016 Service coct Interest cost Expected return on assets Adjust for 30 08 (90) 100 Loss on assets Prior service cost Loss on PBO Prior service cost Cash tunding Retree benelits Bal, Dec. 35, 2016 (28 03

Explanation / Answer

Solution:

1) Filling the Missing Amounts:

2&4) Preparing the journal Entries for 2016:

()s Indicate Credits, Debits Otherwise ($ in Millions) PBO Plan Assets Prior Service Cost-AOCI Net Loss-AOCI Pension Expense Cash Net Pension (Liability/Asset) Balance Jan 1, 2016 (980) 890 30 108 (90) Service Cost (100) 100 (100) Interest Cost (10%) 98 98 (98) Expected Return on Assets 89 (89) 89 Adjust For: Loss on Assets (7) 7 (7) Amortization of: Prior Service Cost (7) 7 Net Loss (1) 1 Loss on PBO (28) 28 (28) Prior Service Cost (45) 45 (45) Cash Funding 93 (93) 93 Retiree Benefits 255 (255) Bal. Dec 31, 2016 (800) 810 68 142 117 10

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