Lacy construction has a noncontributory defined benefit, Ask an Expert

Accounting

Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2013, Lacy received the following information:

Projected Benefit Obligation	($ in millions)
Balance, January 1	$	520
Service cost		76
Interest cost (5%)		26
Benefits paid		(77	)

Balance, December 31	$	545

Plan Assets	($ in millions)
Balance, January 1	$	390
Actual return on plan assets		43
Contributions 2013		76
Benefits paid		(77	)

Balance, December 31	$	432

The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2013. At the end of 2013, Lacy amended the pension formula creating a prior service cost of $28 million.

Required:

1.	Determine Lacy's pension expense for 2013. (Enter your answer in millions.)

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9966616

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