Actuary and trustee reports indicate the following changes in the PBO and plan assets of Douglas-Roberts...

50.1K

Verified Solution

Question

Accounting

Actuary and trustee reports indicate the following changes inthe PBO and plan assets of Douglas-Roberts Industries during2021:
Prior service cost at Jan. 1, 2021, from plan amendment atthe
beginning of 2018 (amortization: $3 million per year) $ 21 million
Net loss—AOCI at Jan.1, 2021 (previous losses exceeded previousgains) $ 160 million
Average remaining service life of the active employeegroup 10 years
Actuary's discount rate 7 %
($ in millions) Plan
PBO Assets
Beginning of 2021 $ 600 Beginning of 2021 $ 400
Service cost 54 Return on plan assets,
8% (10% expected) 32
Interest cost, 7% 42
Loss (gain) on PBO (11 ) Cash contributions 98
Less: Retiree benefits (32 ) Less: Retiree benefits (32 )
End of 2021 $ 653 End of 2021 $ 498

Required:
1-a. Determine Douglas-Roberts's pension expensefor 2021.
1-b, 2. to 4. Prepare the appropriate journalentries to record the pension expense, to record any 2021 gains andlosses, to record the cash contribution to plan assets and torecord retiree benefits.

Answer & Explanation Solved by verified expert

4.3 Ratings (579 Votes)

1a Service Cost 54 Interest Cost 42 Expected Return on Plan assets 400 10 40 Amortization of Prior Service Costs 3 Amortization of Net Loss See working below 10 Pension Expense 69 See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Actuary and trustee reports indicate the following changes in the PBO and plan assets of Douglas-Roberts...

50.1K

Verified Solution

Question

Accounting

Answer & Explanation Solved by verified expert

Get Answers to Unlimited Questions

Membership Benefits:

Other questions asked by students

ABC Daily is a local newspaper company. They have provided both printed newspaper and online news...

Two particles of the same mass enter a magnetic field with the same speed and...

and pour A hollow spherical ball is half submerged in water Through one tap water...

A bag contains 2 yellow balls 3 green balls 5 red balls and 6 black...

12 The coordinates of point A are 1 5 If the slope of the line...

Parkovash, Incorporated, obtained 100 percent of Salerno Companys common stock on January 1,2023,...

Flounder Corporation purchases a patent from Pharoah Company on January 1, 2017, for $80,000. The...

Which of these accounts would normally not be affected by an adjustment? a. Supplies. b....

Chaz Corporation has taxable income in 2023 of $1,312,550 for purposes of computing the 179...

McElroy, Incorporated produces a single model of a popular cell phone in large quantities. A...

Permanent accounts would not include: 21 Multiple Choice 00:59:41 Office Supplies. Accounts Payable. Common Stock...

Please answer whether all of them are either understated, overstated, or no effect. Thank you!...


Prior service cost at Jan. 1, 2021, from plan amendment atthe beginning of 2018 (amortization: $3 million per year)	$	21	million
Net loss—AOCI at Jan.1, 2021 (previous losses exceeded previousgains)	$	160	million
Average remaining service life of the active employeegroup		10	years
Actuary's discount rate		7	%

($ in millions)				Plan
PBO				Assets
Beginning of 2021	$	600		Beginning of 2021	$	400
Service cost		54		Return on plan assets,
				8% (10% expected)		32
Interest cost, 7%		42
Loss (gain) on PBO		(11	)	Cash contributions		98
Less: Retiree benefits		(32	)	Less: Retiree benefits		(32	)
End of 2021	$	653		End of 2021	$	498