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A partially completed pension spreadsheet showing the relationships among the elements that comprise the defined benefit...

A partially completed pension spreadsheet showing the relationships among the elements that comprise the defined benefit pension plan of Universal Products is given below. The actuary's discount rate is 5%. At the end of 2019, the pension formula was amended, creating a prior service cost of $100,000. The expected rate of return on assets was 8%, and the average remaining service life of the active employee group is 20 years in the current year as well as the previous two years.

Required:
Fill in the missing amounts. (Enter your answers in thousands rounded to 1 decimal place.)

Prior Net Pension
Plan Service Net Loss Pension (Liability)
($ in thousands) PBO Assets Cost – AOCI – AOCI Expense Cash / Asset
Balance, Jan. 1, 2021 $(700.0) $400.0 $95.0 $70.0 $(300.0)
Service cost 86.0
Interest cost, 5% (35.0)
Expected return on assets (32.0)
Adjust for:
Loss on assets 7.0
Amortization:
Prior service cost
Amortization:
Net loss
Gain on PBO 10.0
Prior service cost
Cash funding (70.0)
Retiree benefits
Balance, Dec. 31, 2021 $(761.0) $400.0 $90.0 $77.0 $54.0 $(290.0)

Solutions

Expert Solution

Prior Net pension
Plan service Net Pension (Liability) /
($ in thousands) PBO Assets Cost - AOCI Loss - AOCI Expense Cash Assets
Balance, Jan. 1, 2021 -$700.0 $400.0 $95.0 $70.0 $0.0 $0.0 -$300.0
Service cost -$86.0 $86.0 -$86.0
Interest cost, 5% -$35.0 $35.0 -$35.0
Expected return on assets $32.0 -$32.0 $32.0
Adjust for:
Loss on Assets -$7.0 $7.0 -$7.0
Amortization
Prior service cost -$5.0 $5.0
Amortization
Net loss $0.0 $0.0
Gain on PBO $10.0 -$10.0 $10.0
Prior service cost $0.0 $0.0 $0.0
Cash funding $70.0 -$70.0 $70.0
Retiree benefits $50.0 -$50.0
Balance., Dec. 31, 2021 -$761.0 $445.0 $90.0 $67.0 $94.0 -$70.0 -$316.0
Workings :
Computation of net loss amortization :
Net loss–AOCI $             70
10% of $700 PBO (greater than $400 Plan assets) $             70
Amount to be amortized $             -  

ekkarill92 answered 9 months ago
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