E 17-10 Determine pension expense
Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2011, Abbott and Abbott received the following information:
($in millions)
Projected Benefit Obligation
Balance, January 1 $120
Service cost 20
Interest cost 12
Benefits paid (9)
Balance, December 31 $143
Plant Assets
Balance, January 1 $80
Actual return on plan assets 9
Contribution 2011 20
Benefits paid (9)
Balance, December 31 $100
The expected long-term rate of return on plan assets was 10%. There was no prior service cost and a negligible net loss AOCI on January 1, 2011.
Required:
Determine Abbott and Abbott’s pension expense for 2011. Prepare the journal entries to record Abbott and Abbott’s pension expense, funding, and payment for 2011.
Click here for the solution: Abbott and Abbott has a noncontributory, defined benefit pension plan
