Actuary and trustee reports indicate the following changes in the PBO and plan assets of Lakeside Cable during 2024:

Required:
1. Determine Lakeside’s pension expense for 2024, and prepare the appropriate journal entries to record the expense as well as the cash contribution to plan assets and payment of benefits to retirees.
2. Determine the new gains and/or losses in 2024 and prepare the appropriate journal entry(s) to record them.
3. Prepare a pension spreadsheet to assist you in determining end of 2024 balances in the PBO, plan assets, prior service cost—AOCI, the net loss—AOCI, and the pension liability.
4. Assume the following actuary and trustee reports indicating changes in the PBO and plan assets of Lakeside Cable during 2025 ($ in millions):

Determine Lakeside’s pension expense for 2025, and prepare the appropriate journal entries to record the expense, the cash funding of plan assets, and payment of benefits to retirees.
5. Determine the new gains and/or losses in 2025, and prepare the appropriate journal entry(s) to record them.
6. Using T-accounts, determine the balances at December 31, 2025, in the net loss—AOCI and prior service cost—AOCI.
7. Confirm the balances determined in requirement 6 by preparing a pension spreadsheet.

Transcribed Image Text:

Prior service cost at Jan. 1, 2024, from plan amendment at the beginning of 2022 (amortization: $4 million per year) Net loss-pensions at Jan.1, 2024 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate ($ in millions) Beginning of 2024 Service cost Interest cost, 8% Loss (gain) on PBO Less: Retiree benefits End of 2024 PBO $300 48 24 (2) (20) $350 Beginning of 2024 Return on plan assets, 7.5% (10% expected) Cash contributions Less: Retiree benefits End of 2024 $32 million $40 million 10 years 8% Plan Assets $200 15 45 (20) $240