5points ItemSkipped eBookPrintCheck my workCheck My Work button is now enabledItem 5Item 5 5 points Item SkippedThe information below pertains to the retiree health care plan of Thompson Technologies: ($ in 000s) 2018BeginningBalances 2018EndingBalancesAccumulated postretirement benefit obligation $560 $585 Plan assets 0 75 Funded status (560) (510) Prior service cost–AOCI 195 158 Net gain–AOCI (65) (64) Thompson began funding the plan in 2018 with a contribution of $142,000 to the benefit fund at the end of the year. Retirees were paid $53,000. The actuary’s discount rate is 5%. There were no changes in actuarial estimates and assumptions. Required:1. Determine the service cost for 2018.2. Determine the postretirement benefit expense for 2018.3. Determine the net benefit liability for 2018.

Calculation of service cost for 2018 is as follows: Resultant table:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The information below pertains to the retiree health care plan of Thompson Technologies:

	($ in 000s)
	2018 Beginning Balances		2018 Ending Balances
Accumulated postretirement benefit obligation		$	560		$	585
Plan assets			0			75
Funded status			(560	)		(510	)
Prior service cost–AOCI			195			158
Net gain–AOCI			(65	)		(64	)

Thompson began funding the plan in 2018 with a contribution of $142,000 to the benefit fund at the end of the year. Retirees were paid $53,000. The actuary’s discount rate is 5%. There were no changes in actuarial estimates and assumptions.

Required:
1. Determine the service cost for 2018.
2. Determine the postretirement benefit expense for 2018.
3. Determine the net benefit liability for 2018.

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