Lacy Construction has a noncontributory, defined benefit pension
plan. At December 31, 2018, Lacy received the following
|Projected Benefit Obligation||($ in millions)|
|Balance, January 1||$||520|
|Prior service cost||28|
|Balance, December 31||$||573|
|Plan Assets||($ in millions)|
|Balance, January 1||$||390|
|Actual return on plan assets||43|
|Balance, December 31||$||432|
The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2018. At the end of 2018, Lacy amended the pension formula creating a prior service cost of $28 million.
1. Determine Lacy's pension expense for 2018.
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 2018.
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