Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2024, Lacy received the following
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Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2024, Lacy received the following information:
The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2024. At the end of 2024, Lacy amended the pension formula creating a prior service cost of $12 million.
Required:
1. Determine Lacy’s pension expense for 2024.
2. Prepare the journal entry(s) to record Lacy’s (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e) payment of retiree benefits for 2024.
Transcribed Image Text:
Projected Benefit Obligation Balance, January 1 Service cost Prior service cost Interest cost (7.5%) Benefits paid Balance, December 31 Plan Assets Balance, January 1 Actual return on plan assets Contributions, 2024 Benefits paid Balance, December 31 ($ in millions) $360 60 12 27 (37) $422 $240 27 60 (37) $290
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Requirement 1 in millions Service cost 60 Interest cost 27 Expected return on the plan assets 27 actual less 3 gain 24 Amortization of prior service c...View the full answer
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