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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 2016, the pension formula was amended, creating a prior service cost of $180,000. 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 credit amounts with a minus sign and debit amounts with a positive sign.)

Prior Net Pension
Plan Service Net Loss Pension (Liability)
($ in 000s) PBO Assets Cost – AOCI – AOCI Expense Cash / Asset
Balance, Jan. 1, 2018 $(620) $480 $171 $62 $(140)
Service cost 94
Interest cost, 5% (31)
Expected return on assets (39)
Adjust for:
Loss on assets 11
Amortization:
Prior service cost
Amortization:
Net loss
Gain on PBO 18
Prior service cost
Cash funding (78)
Retiree benefits
Balance, Dec. 31, 2018 $(677) $480 $162 $73 $55 $(122)

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Expert Solution

Answer:
Prior Net Pension
Plan Service Net Loss Pension (Liability)
($ in 000s) PBO Assets Cost – AOCI – AOCI Expense Cash / Asset
Balance, Jan. 1, 2018 ($620) $480 $171 $62 ($140)
Service cost -94 94 -94 (0-94)
Interest cost, 5% -31 31 -31 (0-31)
Expected return on assets 39 -39 39 (39-0)
Adjust for: 0
Loss on assets -11 11 -11 (0-11)
Amortization: 0
Prior service cost -9 9 0
Amortization: 0
Net loss 0
Gain on PBO 18 18 (18-0)
Prior service cost 0
Cash funding 78 -78 78 (78-0)
Retiree benefits 50 -50 0
Balance, Dec. 31, 2018 ($677) $536 $162 $73 $95 ($141)
Note:
1 Retiree benefit =(-620-94-31+18)-(-677) $                   (50)
2 Prior Service Cost Amortization =$171-162 $                        9
3 Pension Expense =94+31-39+9 $                     95
4 Plan Asset -Balance, Dec 31, 2018 =$480+39-11+78-50 $                   536
5 Net pension asset/liabilities =-140-94-31+39-11+18+78 $                 (141)

ekkarill92 answered 1 year ago
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