Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2024 are as follows:

The expected long-term rate of return on plan assets was 8%. There were no AOCI balances related to pensions on January 1, 2024, but at the end of 2024, the company amended the pension formula, creating a prior service cost of $12 million.

Required:
1. Calculate the pension expense for 2024.
2. Prepare the journal entries to record (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e) payment of benefits for 2024.
3. What amount will Electronic Distribution report in its 2024 balance sheet as a net pension asset or net pension
liability?

Transcribed Image Text:

PBO balance, January 1 Plan assets balance, January 1 Service cost Interest cost Gain from change in actuarial assumption Benefits paid Actual return on plan assets Contributions 2024 ($ in millions) $480 300 75 45 22 (36) 20 60