Question: Warrick Boards calculated pension expense for its underfunded pension plan as follows:
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($ in millions)
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Service cost
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$224
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Interest cost
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150
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Expected return on the plan assets ($100 actual, less $10 gain)
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(90)
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Amortization of prior service cost
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8
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Amortization of net loss
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2
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Pension expense
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$294
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Required: Which elements of Warrick's balance sheet are affected by the components of pension expense? What are the specific changes in these accounts?