The accounting records of baddour company provided

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The accounting records of Baddour Company provided the data below. Net loss $4,380 Depreciation expense 6,150 Increase in salaries payable 430 Decrease in accounts receivable 1,725 Increase in inventory 2,000 Amortization of patent 430 Reduction in discount on bonds 330 Prepare a reconciliation of net income to net cash flows from operating activities. (Amounts to be deducted and losses should be indicated with a minus sign.)
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4. Award: 12.50 out of 12.50 points Mayer Corporation has a defined benefit pension plan. Mayer’s policy is to fund the plan annually, cash payments being made at the end of each year. Data relating to the pension plan for 2013 are as follows: December 31 ($ in millions) 2013 2012 Plan assets $1,080 $900 Net Pension Expense for 2013: Service cost $ 120 Interest cost (6% × $950) 57 Actual return on the plan assets (14% × $900 = $126) Adjusted for: $9 gain on the plan assets* (117) Amortization of prior service cost 9 Amortization of net loss 2 $ 71 *(14% × $900) − (13% − $900) Required: Recreate the journal entries used to record Mayer’s 2013 pension expense, gain on plan assets, and funding of plan assets in order to determine the cash paid to the pension trustee as reported in the statement of cash flows. (Enter your answers in millions.)
References Worksheet Learning Objective: 21-03 Determine cash flows from operating activities by the direct method. Mayer Corporation has a defined benefit pension plan. Mayer’s policy is to fund the plan annually, cash payments being made at the end of each year. Data relating to the pension plan for 2013 are as follows: December 31 ($ in millions) 2013 2012 Plan assets $1,080 $900 Net Pension Expense for 2013: Service cost $ 120 Interest cost (6% × $950) 57 Actual return on the plan assets (14% × $900 = $126) Adjusted for: $9 gain on the plan assets* (117) Amortization of prior service cost 9 Amortization of net loss 2 $ 71 *(14% × $900) − (13% − $900) Required: Recreate the journal entries used to record Mayer’s 2013 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. (Enter your answers in millions.) General Journal Debit Credit Pension expense Plan assets PBO Net loss - OCI Prior service cost - AOCI Plan assets 71 117 177 2 9
Gain - OCI Plan assets Cash Explanation: PBO = ($120 service cost + $57 interest cost) = $177 million Plan assets = ($1,080 – 900 – 117 – 9) = $54 million 9 9 54 54

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