The Kollar Company has a defined benefit pension plan. Pension information conce

Question

The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2016 and 2017 are presented below ($ in millions):

Prior service cost from plan amendment on January 2, 2016 = $800 (straight-line amortization for 10-year average remaining service period).

Calculate pension expense for 2016 and 2017. (Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)

       

Prepare the journal entries for 2016 and 2017 to record pension expense. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)

       

Prepare the journal entries for 2016 and 2017 to record any gains and losses and new prior service cost. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)

       

Prepare the journal entries for 2016 and 2017 to record the cash contribution to plan assets and benefit payments to retirees. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions. (i.e., 10,000,000 should be entered as 10).)

       

The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2016 and 2017 are presented below ($ in millions):

Explanation / Answer

2016 pension expense:

Pension expense 2016= 808

Journal 2016:

workings for AOCI gain amortisation:

For the year 2017:

Pension expense:

pension expense= 949

Journal:

No entry for new pension prior service cost

Items Annual pension expense Cash OCI-PSC OCI-Gain/loss Pension asset/liability Projected benefit obligation Plan assets Amount Dr/cr Amount Dr/cr Amount Dr/cr Amount Dr/cr Amount Dr/cr Amount Dr/cr Amount Dr/cr Balance Jan 1.2016                     -   Dr                    460 Cr             1,100 Cr                    3,800 Cr              2,700 Dr Service cost                  680 Dr                 680 Cr                        680 Cr Interest cost                  380 Dr                 380 Cr                        380 Cr PSC amortisation                    80 Dr                    80 Cr Return on plan assets                  324 Cr                      74 Dr                 250 Dr                  250 Dr OCI Gain/loss amortisation                      8 Cr                        8 Dr New prior service cost                  800 Dr                 800 Cr                        800 Cr Contributions                  700 Cr                 700 Dr                  700 Dr Benefits paid                        540 Dr                  540 Cr Jounal entry for 2017                  808 Dr                  700 Cr                  720 Dr                      82 Dr                 910 Cr                    1,320 Cr                  410 Dr Opening balance Jan 1 2016                     -   Dr                    460 Cr             1,100 Cr                    3,800 Cr              2,700 Dr Balance Dec 31.2017                  720 Dr                    378 Cr             2,010 Cr                    5,120 Cr              3,110 Dr

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