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Question: lacy construction has a noncontributory defined benefit pension plan at...

Question details

Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2016, Lacy received the following information:

Projected Benefit Obligation ($ in millions)
     Balance, January 1 $ 580
     Service cost 82
     Prior service cost 34
     Interest cost(5.0%) 29
     Benefits paid (92 )
     Balance, December 31 $ 633
  Plan Assets ($ in millions)
     Balance, January 1 $ 450
     Actual return on plan assets 50
     Contributions 2016 82
     Benefits paid (92 )
     Balance, December 31 $ 490

     The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2016. At the end of 2016, Lacy amended the pension formula creating a prior service cost of $34 million.

Required:
1.

Determine Lacy's pension expense for 2016.

      

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 2016. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions. (i.e., 10,000,000 should be entered as 10).)

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