Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2011 are as follows:

Question:

The expected long-term rate of return on plan assets was 8%. There were no AOCI balances related to pensions on January 1, 2011, but at the end of 2011, the company amended the pension formula creating a prior service cost of $12 million, two-thirds of which is related to employees whose pension benefits have vested.

Required:

1. Calculate the pension expense for 2011.

2. Prepare the journal entry to record pension expense, gains or losses, prior service cost, funding, and payment of benefits for 2011.

3. What amount will Electronic Distribution report in its 2011 balance sheet as a net pension asset or net pension liability?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...