Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2024 (the end...
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Accounting
Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2024 (the end of Beale's fiscal year), the following pension-related data were available:
Projected Benefit Obligation
($ in millions)
Balance, January 1, 2024
$ 680
Service cost
70
Interest cost, discount rate, 5%
34
Gain due to changes in actuarial assumptions in 2024
(18)
Pension benefits paid
(34)
Balance, December 31, 2024
$ 732
Plan Assets
($ in millions)
Balance, January 1, 2024
$ 700
Actual return on plan assets
44
(Expected return on plan assets, $49)
Cash contributions
85
Pension benefits paid
(34)
Balance, December 31, 2024
$ 795
January 1, 2024, balances:
($ in millions)
Pension asset
$ 20
Prior service costAOCI (amortization $6 per year)
30
Net gainAOCI (any amortization over 10 years)
110
Required:
1. to 3. Prepare the journal entries required for the pension during 2024.
4. Determine the balances at December 31, 2024, in the net gainAOCI, and prior service costAOCI. [Hint: You might find T-accounts useful.]
5. What amount will Beale report in its 2024 balance sheet as a net pension asset or net pension liability for the funded status of the plan?
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