1. On January 1, 2013, Burleson Corporation s projected benefit obligation was $30 million. During 2013 pension benefits paid by the trustee were $4 million. Service cost for 2013 is $12 million. Pension plan assets (at fair value) increased during 2013 by $6 million as expected. At the end of 2013, there was no prior service cost and a negligible balance in net loss AOCI. The actuary s discount rate was 10%.
Required:
Determine the amount of the projected benefit obligation at December 31, 2013. (Enter your answer in millions.)
2. Pension data for Sterling Properties include the following:
Required:
Service cost, 2013 $112
Projected benefit obligation, January 1, 2013 850
Plan assets (fair value), January 1, 2013 900
Prior service cost AOCI (2013 amortization, $8) 80
Net loss AOCI (2013 amortization, $1) 101
Interest rate, 6%
Expected return on plan assets, 10%
Actual return on plan assets, 11%
Required
Determine pension expense for 2013.
3. Pension data for Millington Enterprises include the following:
Discount rate, 10%
Projected benefit obligation, January 1 $ 360
Projected benefit obligation, December 31 465
Accumulated benefit obligation, January 1 300
Accumulated benefit obligation, December 31 415
Cash contributions to pension fund, December 31 150
Benefit payments to retirees, December 31 54
Required:
Assuming no change in actuarial assumptions and estimates, determine the service cost component of pension expense for the year ended December 31. (Enter your answer in millions.)
4. Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2013, 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
Plant Assets
Balance, January 1 $80
Actual return on plan assets 9
Contribution 2011 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, 2013.
Required:
a. Determine Abbott and Abbott s pension expense for 2013.
b. Prepare the journal entries to record Abbott and Abbott s pension expense, funding, and payment for 2013.