Gorky-Park Corporation provides postretirement health care benefits to employees who provide at least 13 years of service and reach age 63 while in service. On January 1, 2021, the following plan-related data were available: Accumulated postretirement benefit obligation Fair value of plan assets Average remaining service period to retirement Average remaining service period to full eligibility (5 in millions) $ 145 None 25 years (sane in previous 10 yrs.) 20 years (sane in previous 10 yrs.) On January 1, 2021, Gorky-Park amends the plan to provide certain dental benefits in addition to previously provided medical benefits. The actuary determines that the cost of making the amendment retroactive increases the APBO by $30 million. Management chooses to amortize the prior service cost on a straight-line basis. The service cost for 2021 is $41 million. The interest rate is 6%. Required: 1. Calculate the postretirement benefit expense for 2021. 2. Prepare the journal entry to record the expense.

Gorky-Park Corporation provides postretirement health care benefits to employees who provide at least 13 years of service and reach age 63 while in service. On January 1, 2021, the following plan-related data were available: Accumulated postretirement benefit obligation Fair value of plan assets Average remaining service period to retirement Average remaining service period to full eligibility (5 in millions) $ 145 None 25 years (sane in previous 10 yrs.) 20 years (sane in previous 10 yrs.) On January 1, 2021, Gorky-Park amends the plan to provide certain dental benefits in addition to previously provided medical benefits. The actuary determines that the cost of making the amendment retroactive increases the APBO by $30 million. Management chooses to amortize the prior service cost on a straight-line basis. The service cost for 2021 is $41 million. The interest rate is 6%. Required: 1. Calculate the postretirement benefit expense for 2021. 2. Prepare the journal entry to record the expense.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 1E

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On January 1, 2019, Fun Company adopted a healthcare plan for its retired employees. To determine eligibility for benefits, the company retroactively gives credit to the date of hire for each employee. The following information is available about the plan: Service cost $31,550 Accumulated postretirement benefit obligation (1/1/19) 114,000 Expected return on plan assets 0 Amortization of Prior service cost 11,400 Payments to retired employees during 2019 5,530 Interest rate 10% Average remaining service period of active plan participants (1/1/19) 10 years Required: 1. Compute the OPRB expense for 2019 if the company uses the average remaining service life to amortize the prior service cost. 2. Prepare all the required journal entries for 2019 if the plan is not funded.
Classified Electronics has an unfunded retiree health care plan. Each of the company's three employees has been with the firm since its inception at the beginning of 2023. As of the end of 2024, the actuary estimates the total net cost of providing health care benefits to employees during their retirement years to have a present value of $84,000. Each of the employees will become fully eligible for benefits after 22 more years of service but aren't expected to retire for 35 more years. The interest rate is 6%. Required: 1. What is the expected postretirement benefit obligation at the end of 2024? 2. What is the accumulated postretirement benefit obligation at the end of 2024? 3. What is the expected postretirement benefit obligation at the end of 2025? 4. What is the accumulated postretirement benefit obligation at the end of 2025? 1. Expected postretirement benefit obligation 2024 2. Accumulated postretirement benefit obligation 2024 3. Expected postretirement benefit obligation 2025…
The following data are available pertaining to Household Appliance Company's retiree health care plan for 2024: Number of employees covered Years employed as of January 1, 2024 Attribution period Complete this question by entering your answers in the tabs below. Expected postretirement benefit obligation, January 1 Expected postretirement benefit obligation, December 31 Interest rate Funding Required: 1. What is the accumulated postretirement benefit obligation at the beginning of 2024? 2. What is interest cost to be included in 2024 postretirement benefit expense? 3. What is service cost to be included in 2024 postretirement benefit expense? 4. Prepare the journal entry to record the postretirement benefit expense for 2024. Req 1 to 3. Req 4 1. Accumulated postretirement benefit obligation 2. Interest cost 3. Service cost 2 3 [each] What is the accumulated postretirement benefit obligation at the beginning of 2024? What is interest cost and service cost to be included in 2024…
Gorky-Park Corporation provides postretirement health care benefits to employees who provide at least 12 years of service and reach age 62 while in service. On January 1, 2024, the following plan-related data were available: Accumulated postretirement benefit obligation Fair value of plan assets Average remaining service period to retirement Average remaining service period to full eligibility ($ in millions) $ 130 None 25 years (same in previous 10 years) 20 years (same in previous 10 years) On January 1, 2024, Gorky-Park amends the plan to provide certain dental benefits in addition to previously provided medical benefits. The actuary determines that the cost of making the amendment retroactive increases the APBO by $20 million. Management chooses to amortize the prior service cost on a straight-line basis. The service cost for 2024 is $38 million. The interest rate is 9%. Required: 1. Calculate the postretirement benefit expense for 2024. 2. Prepare the journal entry to record the…
Subject : Accounting
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Please answer a and b with details about the calculation.
Based upon this information, how would I make the following journal entries? Record annual pension expense. Record the change in plan assets. Record the change in the PBO. Record the cash contribution to plan assets. Record the retiree benefits paid.
$1,000,000 500,000 1,840,000 250,000 120,000 10% Service cost Actual return on plan assets Annual contribution to the plan Amortization of prior service cost Benefits paid to retirees Settlement rate Expected rate of return on plån assets 8% Balances at 12/31/2020 are: Prior Service Cost Projected Benefit Obligation Plan Assets 1,250,000 Dr 8,000,000 Cr 5,500,000 Dr
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