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 expense. Complete this question by entering your answers in the tabs below.

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 expense. Complete this question by entering your answers in the tabs below.

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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