er 15 Assignment i Saved 3 Help Save & Exit Submit Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question Exercise 15-15 Determining postretirement (health care) benefits expense and obligation (LO 15-7) Jones Company has a postretirement benefit (health care) plan for its employees. On January 1, 20X1, the balance in the Accumulated postretirement benefit obligation account was $300 million. The assumed discount rate-for purposes of determining postretirement obligations and expenses-is 8%. Jones does not prefund postretirement benefits, so there are no plan assets. It created a $45 million prior service cost credit at the end of 20X0 when the company modified the health care plan to reduce the maximum benefits paid to each employee. This amount is being amortized over 15 years. The service cost component of postretirement benefits for 20X1 is $35 million. Required: 1. Determine the amount of postretirement benefits cost for 20X1. 2. If benefits paid to retirees totaled $64 million in 20X1, determine the balance in the Accumulated postretirement benefit obligation account on December 31, 20X1. (For all requirements, enter your answers in millions of dollars and not in dollars (e.g. $3,000,000 should be entered as $3).)
er 15 Assignment i Saved 3 Help Save & Exit Submit Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question Exercise 15-15 Determining postretirement (health care) benefits expense and obligation (LO 15-7) Jones Company has a postretirement benefit (health care) plan for its employees. On January 1, 20X1, the balance in the Accumulated postretirement benefit obligation account was $300 million. The assumed discount rate-for purposes of determining postretirement obligations and expenses-is 8%. Jones does not prefund postretirement benefits, so there are no plan assets. It created a $45 million prior service cost credit at the end of 20X0 when the company modified the health care plan to reduce the maximum benefits paid to each employee. This amount is being amortized over 15 years. The service cost component of postretirement benefits for 20X1 is $35 million. Required: 1. Determine the amount of postretirement benefits cost for 20X1. 2. If benefits paid to retirees totaled $64 million in 20X1, determine the balance in the Accumulated postretirement benefit obligation account on December 31, 20X1. (For all requirements, enter your answers in millions of dollars and not in dollars (e.g. $3,000,000 should be entered as $3).)
Chapter1: Financial Statements And Business Decisions
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Exercise 15-15 Determining postretirement (health care) benefits expense and obligation (LO 15-7)
Jones Company has a postretirement benefit (health care) plan for its employees. On January 1, 20X1, the balance in the Accumulated
postretirement benefit obligation account was $300 million. The assumed discount rate-for purposes of determining postretirement
obligations and expenses-is 8%. Jones does not prefund postretirement benefits, so there are no plan assets. It created a $45 million
prior service cost credit at the end of 20X0 when the company modified the health care plan to reduce the maximum benefits paid to
each employee. This amount is being amortized over 15 years. The service cost component of postretirement benefits for 20X1 is $35
million.
x Answer is complete but not entirely correct.
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1. Determine the amount of postretirement benefits cost for 20X1.
2. If benefits paid to retirees totaled $64 million in 20X1, determine the balance in the Accumulated postretirement benefit obligation
account on December 31, 20X1.
(For all requirements, enter your answers in millions of dollars and not in dollars (e.g. $3,000,000 should be entered as $3).)
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