The Warren Group’s pension cost is $39 million. This amount includes a $68 million service cost, a $36 million interest cost, a $67 million reduction for the expected return on plan assets, and a $2 million amortization of a prior service cost. 1. Choose the components of pension expense that affects the net pension liability: Service costunanswered Amortization of prior service costunanswered Interest costunanswered Expected return on plan assets 2. Prepare the journal entry to record the pension cost.

The Warren Group’s pension cost is $39 million. This amount includes a $68 million service cost, a $36 million interest cost, a $67 million reduction for the expected return on plan assets, and a $2 million amortization of a prior service cost. 1. Choose the components of pension expense that affects the net pension liability: Service costunanswered Amortization of prior service costunanswered Interest costunanswered Expected return on plan assets 2. Prepare the journal entry to record the pension cost.

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter9: Operating Activities

Section: Chapter Questions

Problem 12QE

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Warrick Boards calculated pension expense for its underfunded pension plan as follows: ($ in millions) Service cost $ 224 Interest cost 150 Expected return on the plan assets ($100 actual, less $10 gain) (90 ) Amortization of prior service cost 8 Amortization of net loss 2 Pension expense $ 294 Required: Which elements of Warrick’s balance sheet are affected by the components of pension expense? What are the specific changes in these accounts?
Assume that actual returns and expected returns to plan assets in a defined benefit pension plan are +$10 and +$12, respectively. What is the effect in the current period on pension expense? Select One: a.Pension expense is increased by $10 b.Pension expense is reduced by $10 c.Pension expense is reduced by $12 d.None of the listed answers
Presented below is pension information for Pharoah Company for the year 2026: Actual return on plan assets Interest on vested benefits Service cost Interest on projected benefit obligation Amortization of prior service cost due to increase in benefits $76000 O $355000. O $203000. O $279000. O $192000. 49000 154000 67000 58000 If the actual return equals the expected return on plan assets, the amount of pension expense to be reported for 2026 is
the warren groups pension expense is 78 million. the amount includes a 46 million service cost, a 60 million interest cost, a 34 million reduction for the expected return on plan assets, and a 6 million amoritization of a prior service cost. prepare the journal entry to record the pension expense?
The net pension liability (PBO minus plan assets) is increased by: A. Service cost. B. Expected return on plan assets. C. Amortization of prior service cost. D. Cash contributions to plan assets.
Presented below is information related to Sandhill Inc. pension plan for 2021. Service cost $ 1160000 Actual return on plan assets 248000 Interest on projected benefit obligation 480000 Amortization of net loss 100000 Amortization of prior service cost due to increase in benefits 200000 Expected return on plan assets 220000 What amount should be reported for pension expense in 2021?
3. Presented below is information related to the pension plan of Zimmer Inc. for the year 2018. 1. The service cost related to pension expense is $260,000 using the projected benefits approach. 2. The projected benefit obligation and the accumulated benefit obligation at the beginning of the year are $350,000 and $280,000, respectively. The expected return on plan assets is 9% and the settlement rate is 10%. 3. The accumulated OCI – prior service cost at the beginning of the year is $140,000. The company has a workforce of 200 employees, all who are expected to receive benefits under the plan. The total number of service- years is 1,000 and the service-years attributable to 2018 is 200. The company has decided to use the years-of-service method of amortization for these costs. At the beginning of the period, the fair value of pension plan assets was $280,000. The company had an Accumulated OCI (loss) at the beginning of the period of $90,000. Any amortization of unrecognized net loss…
1) The following information is related to the pension plan of Smeylie, Inc. for 2021. Actual return on plan assets $ 430,000 Amortization of net gain 90,500 Amortization of prior service cost due to increase in benefits 150,000 Expected return on plan assets 375,000 Interest on projected benefit obligation 565,500 Service cost 1,400,000 Contributions/Funding 1,250,000 Required: A.) Calculate the pension expense for 2021. B.) Prepare the journal entry to record the pension expense and the funding. C.) Calculate the actuarial gain or loss related to return on assets for 2021, and prepare the entry for other comprehensive income for the unrecognized gain or loss. D.) Prepare the entry to record the adjustment to other comprehensive income because of the amortization of prior service costs.
For a defined benefit pension plan, pension expense consists of five components, for which the formula is Service Cost – Interest Cost + Expected Return on Plan Assets – Amortization of Prior Service Cost +(–) Gain (Loss). Service Cost + Interest Cost – Expected Return on Plan Assets + Amortization of Prior Service Cost +(–) Gain (Loss). Service Cost + Interest Cost + Expected Return on Plan Assets – Amortization of Prior Service Cost +(–) Gain (Loss). Service Cost – Interest Cost + Expected Return on Plan Assets + Amortization of Prior Service Cost +(–) Gain (Loss).
Presented below is information related to Ivanhoe Inc. pension plan for 2021. Service cost $ 860000 Actual return on plan assets 200000 Interest on projected benefit obligation 420000 Amortization of net loss 70000 Amortization of prior service cost due to increase in benefits 170000 Expected return on plan assets 190000 What amount should be reported for pension expense in 2021? 1100000 1320000 1510000 1330000
AU.S. company uses the expected return on plan assets to calculate the net periodic pension cost for its only pension plan. In Year 1, the plan's actual return was 5 percent versus an expected return of 7 percent This diferential will cause an increase to all of the following except the: O Funded status. O Fair value of plan assets. O Net periodic pension cost. O Projected benefit obligation.
Pension data for Sterling Properties include the following: Service cost, 2021 Projected benefit obligation, January 1, 2021 Plan assets (fair value), January 1, 2021 Prior service cost-AOCI (2021 amortization, $8) Net loss-AOCI (2021 amortization, $1) Interest rate, 8% Expected return on plan assets, 12% Actual return on plan assets, 13% Service cost Interest cost Required: Determine pension expense for 2021. (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.) Pension Expense Expected return on plan assets Amortization of prior service cost Amortization of net loss Pension expense $ ($ in thousands) $ 117 0 600 700 87 108