Electronic Distribution has a defined benefit pension plan.Characteristics of the plan during 2021 are as follows:
| ($ millions) |
| PBO balance, January 1 | | $ | 460 | |
| Plan assets balance, January 1 | | | 250 | |
| Service cost | | | 65 | |
| Interest cost | | | 35 | |
| Gain from change in actuarial assumption | | | 22 | |
| Benefits paid | | | (32 | ) |
| Actual return on plan assets | | | 22 | |
| Contributions 2021 | | | 55 | |
|
The expected long-term rate of return on plan assets was 10%. Therewere no AOCI balances related to pensions on January 1, 2021, butat the end of 2021, the company amended the pension formula,creating a prior service cost of $11 million. (Enter youranswers in millions (i.e., 10,000,000 should be entered as10).)
Required:
1. Calculate the pension expense for2021.
2. Prepare the journal entries to record (a)pension expense, (b) gains or losses, (c) prior service cost, (d)funding, and (e) payment of benefits for 2021.
3. What amount will Electronic Distribution reportin its 2021 balance sheet as a net pension asset or net pensionliability?
