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Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2013 are as follows:


 ($ millions)
  PBO balance, January 1
$530     
  Plan assets balance, January 1
300     
  Service cost
50     
  Interest cost
30     
  Gain from change in actuarial assumption
36     
  Benefits paid
(46)    
  Actual return on plan assets
23     
  Contributions 2013
40     

 

     The expected long-term rate of return on plan assets was 9%. There were no AOCI balances related to pensions on January 1, 2013, but at the end of 2013, the company amended the pension formula creating a prior service cost of $18 million. Assume Electronic Distribution prepares its financial statements according to International Financial Reporting Standards. Also assume that 10% is the current interest rate on high-quality corporate bonds.

 

Required:
1.

Calculate the net pension cost for 2013, separating its components into appropriate categories for reporting. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

 

1.

Calculate the net pension cost for 2013, separating its components into appropriate categories for reporting. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)





($ in millions)
Service cost
Net interest cost
Remeasurement gain from assumption change
Remeasurement loss on plan assets
Net pension cost

What amount will Electronic Distribution report in its 2013 balance sheet as a net pension asset or net pension liability? (Enter your answer in millions.)

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M9797423

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