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cure Thttphewconnectmneducation.com/flow/connect.htm 0 Saving Required information [The following information applies to the questions displayed below.] Actuary and trustee reports indicate the following changes in the PBO and plan assets of Lakeside Cable during 2018: Prior service cost at Jan. 1, 2018, from plan amendment at the beginnine of 2016 (amortization: $6 million per year) Net loss-pensions at Jan.1, 2018 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate $45 million $63 million 10 years 18% (S in millions) Pl PBO Asset $300 $430 Beginning of 2018 Beginning of 2018 Service cost Interest cost, 10% Loss (gain) on PBO Less: Retiree benefits End of 2018 61 Return on plan assets, 43 9.0%(10% expected) (2) Cash contributions 27 75 (52) Less: Retiree benefits $480 End of 2018 (52) $350 Required: -a. Determine Lakeside's pension expense for 2018. (Ente r your answers in millions (i.e., 10,000,000 should be entered as

Explanation / Answer

Lakeside's Pension Expense for 2018 =

Service cost = 61

Interest cost = 43

Expected return on the plan assets ($27 actual, plus $9 loss) = (18)

Amortization of prior service cost = (9)

Amortization of net loss = 2*

Pension expense = 79

*

Computation of net loss amortization Net loss–AOCI (previous losses exceeded previous gains) 63 10% of $430 PBO (greater than $300 plan assets) -43 Amount to be amortized 20 ÷ 10 Amortization 2

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