Question

Actuary and trustee reports indicate the following changes in the PBO and plan assets of Lakeside Cable during 2018:

Prior service cost at Jan. 1, 2018, from plan amendment at the beginning of 2016 (amortization: $6 million per year)	$	51	million
Net loss–pensions at Jan.1, 2018 (previous losses exceeded previous gains)	$	59	million
Average remaining service life of the active employee group		10	years
Actuary’s discount rate		10	%

($ in millions)

	PBO				Plan Assets
Beginning of 2018	$	490		Beginning of 2018		$	400
Service cost		67		Return on plan assets,
Interest cost, 10%		49		9.5% (10% expected)			38
Loss (gain) on PBO		(2	)	Cash contributions			66
Less: Retiree benefits		(64	)	Less: Retiree benefits			(64	)
End of 2018	$	540		End of 2018		$	440

7. Prepare a pension spreadsheet to assist you in determining end of 2018 balances in the PBO, plan assets, prior service cost—AOCI, the net loss—AOCI, and the pension liability. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). Enter credit amounts with a minus sign and debit amounts with a positive sign.)

Answer 1