Burleson Corporation’s projected benefit obligation was $30

1. On January 1, 2013, Burleson Corporation’s projected benefit obligation was $30 million. During 2013 pension benefits paid by the trustee were $4 million. Service cost for 2013 is $12 million. Pension plan assets (at fair value) increased during 2013 by $6 million as expected. At the end of 2013, there was no prior service cost and a negligible balance in net loss–AOCI. The actuary’s discount rate was 10%.

Required:

Determine the amount of the projected benefit obligation at December 31, 2013. (Enter your answer in millions.)

2. Pension data for Sterling Properties include the following:

Required:

Service cost, 2013                                                  $112

Projected benefit obligation, January 1, 2013        850

Plan assets (fair value), January 1, 2013                900

Prior service cost–AOCI (2013 amortization, $8)  80

Net loss–AOCI (2013 amortization, $1)                101

Interest rate, 6%

Expected return on plan assets, 10%

Actual return on plan assets, 11%

Required

Determine pension expense for 2013.

3. Pension data for Millington Enterprises include the following:

Discount rate, 10%

Projected benefit obligation, January 1  $ 360

Projected benefit obligation, December 31  465

Accumulated benefit obligation, January 1  300

Accumulated benefit obligation, December 31    415

Cash contributions to pension fund, December 31    150

Benefit payments to retirees, December 31    54

Required:

Assuming no change in actuarial assumptions and estimates, determine the service cost component of pension expense for the year ended December 31. (Enter your answer in millions.)

4. Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2013, 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, 2013.

Required:

a. Determine Abbott and Abbott’s pension expense for 2013.

b. Prepare the journal entries to record Abbott and Abbott’s pension expense, funding, and payment for 2013.