3060059365 - Exercise 17-6 ($ in millions) PBO: Beginning...

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Exercise 17-6 ($ in millions) PBO: Beginning of 2007 $360 Service cost ? Interest cost 36 (10% x $360) Loss (gain) on PBO 0 Less: Retiree benefits (54 ) End of 2007 $465 Service cost = $465 360 36 + 54 = $123 million Exercise 17-7 ($ in millions) Plan assets Beginning of 2007 $700 Actual return 77 (11% x $700) Cash contributions ? Less: Retiree benefits (66 ) End of 2007 $750 Cash contributions = $750 700 77 + 66 = $39 million Exercise 17-8 ($ in 000s) Service cost $112 Interest cost (6% x $850) 51 Expected return on the plan assets ($99 actual, less $9 gain*) (90) Amortization of prior service cost 8 Amortization of net loss–pensions 1 Pension expense $82 * (11% x $900) – (10% x $900)
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Requirement 1 ($ in millions) Service cost $20 Interest cost 12 Expected return on the plan assets ($9 actual, less $1 gain) (8 ) Pension expense $24 Requirement 2 Pension expense (calculated above) 24 Pension liability 24 Pension liability 20 Cash (given) 20 Exercise 17-19 B 1. Change in actuarial assumptions for a defined benefit pension plan. C 2. Determination that the accumulated benefits obligation under a pension plan exceeded the fair value of plan assets at the end of the previous year by $17,000. The only pension-related amount on the balance sheet was prepaid pension costs of $30,000. B 3. Pension plan assets for a defined benefit pension plan achieving a rate of return in excess of the amount anticipated. D
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3060059365 - Exercise 17-6 ($ in millions) PBO: Beginning...

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