Northrop Grumman is a leading aerospace/defense company. The company has developed the F-16 fighter, the Apache helicopter, the AWACS early warning airborne radar, and the B-2 Stealth bomber. Grumman, one of the predecessor companies of Northrop Grumman, was the primary contractor for the Lunar Excursion Module (LEM) that landed Neil Armstrong on the moon in 1969. Information relating to Northrop Grumman€™s pension and other postretirement benefit plans follows.

Based on this information, answer the following questions:
1. Is Northrop Grumman€™s pension plan overfunded or underfunded? How can you tell?
2. In 2004, was the actual return on the pension fund more or less than the expected amount? Explain.
3. During 2004, Northrop Grumman acquired new subsidiaries that had pre-existing defined benefit pension plans. Were those plans overfunded or underfunded?
4. Recreate the summary journal entry required to recognize Northrop Grumman€™s additional minimum pension liability as of the end of 2004. For simplicity, assume that the entire amount was recognized in 2004.
5. Are Northrop Grumman€™s medical and life benefits programs overfunded orunderfunded?

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Medical and Life Benefits Pension Benefits $ in millions 2004 2003 2004 2003 Change in benefit obligation Beneft obligation at beginning of year Service cost $16,872 $21,524 491 1,022 $2,986 $3,809 176 63 Interest cost 1,050 Plan partcipants' contributions. Special termination benefits Plan amendments Actuarlal loss (13) 1,555 (81) 302 205 (5.216) Acquisitions/transfers (17) (47) (1,029)(1.091) 16,872 (259) (244) 2.986 Benefit obligations at end of year Change In plan assets Fair value of plan assets at beginning of year...... Gain on plan assets 19.338 5,985 2,076 624 18,532 3,023 329 2 Plan particlpants' contributions Divestitures 63 (83) (4,808) Beneftts pald Other (.029) (.) (259 _(244) Fair value of plan assets at end of year....... Funded status Unrecognized prior service cost Unrecognized net transltion asset Unrecognized net loss Net asset (lablity) recognized 7,720 (1.618) 15,985 (887) (2.469) (10) (2.298) 322 2,647 1,353 289 1,799 562 397 $1,201 $(1.917) $(1.898) Amounts recognized in the statements of financial position Prepaid benefit cost Accrued benefit lability Intangible asset Accumulated other comprehensive loss Net asset (lability) recognized $ 2,868 2,918 $46 (1.773,869) (1.963) (1,942) 126 1,353 1.20 $(1.917) $(1.898)