Problem #1: Harrison Forklift’s pension expense includes a service cost of $10 million. Harrison began the year with a pension liability of $28 million (underfunded pension plan). 1.Interest cost, $
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Problem #1:
Harrison Forklift’s pension expense includes a service cost of $10 million. Harrison began the year with a pension liability of $28 million (underfunded pension plan).
1.Interest cost, $6; expected return on assets, $4; amortization of net loss, $2.2.Interest cost, $6; expected return on assets, $4; amortization of net gain, $2.3.
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Order Paper NowInterest cost, $6; expected return on assets, $4; amortization of net loss, $2; amortization of prior service cost, $3 million.
Required:
Prepare the appropriate general journal entries to record Harrison’s pension expense in each of the following independent situations regarding the other components of pension expense ($ in millions):
Problem #2:
Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2016, Abbott and Abbott received the following information:
($ in millions) Projected Benefit Obligation Balance, January 1$120 Service cost 20 Interest cost 12 Benefits paid (9) Balance, December 31$143 Plan Assets Balance, January 1$80 Actual return on plan assets 9 Contributions 2016 20 Benefits paid (9) Balance, December 31$100
The expected long-term rate of return on plan assets was 10%. There was no prior service cost and a negligible net loss–AOCI on January 1, 2016.
Required:1.
Determine Abbott and Abbott’s pension expense for 2016.
