Hutchison-Sun Corporation has a defined benefit pension plan

Hutchison-Sun Corporation has a defined benefit pension plan. Hutchison-Sun’s policy is to fund the plan annually, cash payments being made at the end of each year. Data relating to the pension plan for 2024 are as follows:

Required:
Re-create the journal entries used to record Hutchison-Sun’s 2024 pension expense, gain on plan assets, and funding of plan assets in order to determine the cash paid to the pension trustee as reported in the statement of cash flows.

Expert Solution

$ in millions

Pension expense(given)…………………………………… 82
Plan assets (expected return)……………………………….. 90

PBO ($112 service cost + $51 interest cost)…………….. 163

Amortization of net loss—OCI(given)……………… 1

Amortization of prior service cost—OCI(given)….. 8

Plan assets…………………………………………………… 9
Gain—OCI (given)……………………………………... 9

Plan assets($1,080 – $900 – $90 – $9)…………………….. 81

Cash (paid to the pension trustee)………………………. 81

Raffay answered 2 years ago

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