Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2021, Lacy received the following information: ($ in millions) $600 64 16 36 (47) Projected Benefit Obligation Balance, January 1 Service cost Prior service cost Interest cost (6.0%) Benefits paid. Balance, December 31 Plan Assets Balance, January 1 Actual return on plan assets Contributions 2021 Benefits paid Balance, December 31 $669 ($ in millions) $270 29 64 (47) $316 The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2021. At the end of 2021, Lacy amended the pension formula creating a prior service cost of $16 million. Required: 1. Determine Lacy's pension expense for 2021. 2. Prepare the journal entry(s) to record Lacy's (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e) payment of retiree benefits for 2021.

Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2021, Lacy received the following information: ($ in millions) $600 64 16 36 (47) Projected Benefit Obligation Balance, January 1 Service cost Prior service cost Interest cost (6.0%) Benefits paid. Balance, December 31 Plan Assets Balance, January 1 Actual return on plan assets Contributions 2021 Benefits paid Balance, December 31 $669 ($ in millions) $270 29 64 (47) $316 The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2021. At the end of 2021, Lacy amended the pension formula creating a prior service cost of $16 million. Required: 1. Determine Lacy's pension expense for 2021. 2. Prepare the journal entry(s) to record Lacy's (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e) payment of retiree benefits for 2021.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 4E

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