Reference no: EM132499216
Question - Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2021 are as follows:
($ millions) PBO balance, January 1 $500
Plan assets balance, January 1 450
Service cost 85
Interest cost 55
Gain from change in actuarial assumption 30
Benefits paid (40)
Actual return on plan assets 20
Contributions 2021 75
The expected long-term rate of return on plan assets was 6%. There were no AOCI balances related to pensions on January 1, 2021, but at the end of 2021, the company amended the pension formula, creating a prior service cost of $15 million. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)
Required -
1. Calculate the pension expense for 2021.
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 report in its 2021 balance sheet as a net pension asset or net pension liability?