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Lacy Construction has a noncontributory, defined benefit pension plan

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Question;Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2013, Lacy received the following information:Projected Benefit Obligation ($ in millions)Balance, January 1 $ 500Service cost 74Interest cost (5%) 25Benefits paid (72)Balance, December 31 $ 527Plan Assets ($ in millions)Balance, January 1 $ 370Actual return on plan assets 42Contributions 2013 74Benefits paid (72)Balance, December 31 $ 414The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2013. At the end of 2013, Lacy amended the pension formula creating a prior service cost of $26 million.Required:1. Determine Lacy's pension expense for 2013.2. Prepare the journal entry(s) to record Lacy?s pension expense, gains or losses, prior service cost, funding, and payment of retiree benefits for 2013.

 

Paper#38367 | Written in 18-Jul-2015

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