Lender company provides postretirement health care benefits to employees who provide at least 10 years of service and reach the age of 65 while in service. On January 1 of the current year, the following plan related data we’re available. APBO balance 157 million FV plan assets 0 Average remaining service period to retirement 25 years Average remaining service period to full eligibility 20 years On jan1 of the current year, Lender amends the plan to provide dental benefits. The actuary determines that the cost of making the amendment increases the APBO by 27 million. Management chooses to amortize this amount on a straight line basis. The service cost is 47 million. The interest rate =10% Calculate the postretirement expense for the current year Average
Lender company provides postretirement health care benefits to employees who provide at least 10 years of service and reach the age of 65 while in service. On January 1 of the current year, the following plan related data we’re available. APBO balance 157 million FV plan assets 0 Average remaining service period to retirement 25 years Average remaining service period to full eligibility 20 years On jan1 of the current year, Lender amends the plan to provide dental benefits. The actuary determines that the cost of making the amendment increases the APBO by 27 million. Management chooses to amortize this amount on a straight line basis. The service cost is 47 million. The interest rate =10% Calculate the postretirement expense for the current year Average
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Lender company provides postretirement health care benefits to employees who provide at least 10 years of service and reach the age of 65 while in service. On January 1 of the current year, the following plan related data we’re available. APBO balance 157 million
FV plan assets 0
Average remaining service period to retirement 25 years
Average remaining service period to full eligibility 20 years
On jan1 of the current year, Lender amends the plan to provide dental benefits. The actuary determines that the cost of making the amendment increases the APBO by 27 million. Management chooses to amortize this amount on a straight line basis. The service cost is 47 million. The interest rate =10%
Calculate the postretirement expense for the current year
Average
Transcribed Image Text:Ight-liné basis. The service cost is $47,00
Required:
Calculate the postretirement benefit expense for the currer
decimal places (i.e., 5,500,000 should be entered as 5.50
Postretirement Benefit Expense
($ in millions)
Return on plan assets
Postretirement benefit expense
0.00
%24
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