question archive The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC)
The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC)
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| The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC). |
| ($ in millions) debit (credit) | PBO | Plan assets | Prior service cost | Net (Gain) loss | Pension Expenses | Cash | Net Pension (Liability)/ Asset |
| Beginning Balance | (590) | 85 | |||||
| Service cost | 89 | ||||||
| Interest cost | |||||||
| Expected return on assets | (32) | ||||||
| Gain/loss on assets | (6.50) | ||||||
| Amortization of: | |||||||
| Prior service cost | (15) | ||||||
| Net gain loss | |||||||
| Loss on PBO | (34) | (34) | |||||
| Contribution to funds | (83) | ||||||
| Retiree benefits paid | 61 | (61) | |||||
| Ending balance | (679) | 341 | 81 | 105 | (339) | ||
| What was the balance of the net pension asset/liability reported in the balance sheet at the end of the previous year? |
1. Net pension asset of $310.50.
2. Net pension asset of $555.00.
3. Net pension liability of $555.00.
4. Net pension liability of $310.00.
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Answer:
Service Cost (Pension Expense Column) = 89
Interest Cost = -679 + 590 + 89 (Pension Expense Column) + 34 - 61 = - 27 (in Pension Expense Column)
Expected Return on Assets = -32
Gain/Loss on Assets = 6.50
Loss on PBO = -34
Cash Contributions = 83
Beginning Pension Liability = -339 + 89 + 27 - 32 - 6.50 + 34 - 83 = -310.50
Option D (Net pension liability of $310.50)
