Question

Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2016, Lacy received the following information:

Projected Benefit Obligation	($ in millions)
Balance, January 1	$	360
Service cost		60
Prior service cost		12
Interest cost(7.5%)		27
Benefits paid		(37	)
Balance, December 31	$	422

Plan Assets	($ in millions)
Balance, January 1	$	240
Actual return on plan assets		27
Contributions 2016		60
Benefits paid		(37	)
Balance, December 31	$	290

     The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2016. At the end of 2016, Lacy amended the pension formula creating a prior service cost of $12 million.

Assume Lacy Construction prepares its financial statements according to International Financial Reporting Standards and that the actuary's discount rate is the rate on high quality corporate bonds.

Required:

1.

Determine Lacy’s pension expense for 2016.

2.

Prepare the journal entry(s) to record Lacy’s pension expense, gains or losses, prior service cost, funding, and payment of retiree benefits for 2016. (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).) event 1:Record the service cost. event 2:Record the net interest cost. event 3: Record the gain or loss on plan assets. event 4:Record the gain or loss on plan assets. event 5: Record the gain or loss on plan assets. NOTE: Please do not use previous answers already made in Chegg because some values are not correct. Thank you

Answer 1