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Oberon 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 were available. Net loss-postretirement benefit plan APBO balance Fair value of plan assets Average remaining service period to retirement Average remaining service period to full eligibility $ 10,440,000 $103,200,000 none 20 years 15 years On January 1 of the current year, Oberon amended the plan to provide dental benefits. The actuary determines that the cost of making the amendment increases the APBO by $8,850,000. Management chooses to amortize this amount on a straight-line basis. The service cost is $52,000,000. The appropriate interest rate is 10%. Required: Calculate the postretirement benefit expense for the current year. (Round your answers to the nearest thousands of dollars.) ($ in thousands) Service cost Interest cost Return on plan assets $ 52,000 104,085 0 Amortization of prior service cost 590 Amortization of net loss 522 Postretirement benefit expense $ 157,197

Oberon 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 were available. Net loss-postretirement benefit plan APBO balance Fair value of plan assets Average remaining service period to retirement Average remaining service period to full eligibility $ 10,440,000 $103,200,000 none 20 years 15 years On January 1 of the current year, Oberon amended the plan to provide dental benefits. The actuary determines that the cost of making the amendment increases the APBO by $8,850,000. Management chooses to amortize this amount on a straight-line basis. The service cost is $52,000,000. The appropriate interest rate is 10%. Required: Calculate the postretirement benefit expense for the current year. (Round your answers to the nearest thousands of dollars.) ($ in thousands) Service cost Interest cost Return on plan assets $ 52,000 104,085 0 Amortization of prior service cost 590 Amortization of net loss 522 Postretirement benefit expense $ 157,197

Intermediate Accounting: Reporting And Analysis
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 11RE
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Oberon 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 were available. Net loss-postretirement benefit plan APBO balance Fair value of plan assets Average remaining service period to retirement Average remaining service period to full eligibility $ 10,440,000 $103,200,000 none 20 years 15 years On January 1 of the current year, Oberon amended the plan to provide dental benefits. The actuary determines that the cost of making the amendment increases the APBO by $8,850,000. Management chooses to amortize this amount on a straight-line basis. The service cost is $52,000,000. The appropriate interest rate is 10%. Required: Calculate the postretirement benefit expense for the current year. (Round your answers to the nearest thousands of dollars.) ($ in thousands) Service cost Interest cost Return on plan assets $ 52,000 104,085 0 Amortization of prior service cost 590 Amortization of net loss 522 Postretirement benefit expense $ 157,197
Transcribed Image Text:Oberon 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 were available. Net loss-postretirement benefit plan APBO balance Fair value of plan assets Average remaining service period to retirement Average remaining service period to full eligibility $ 10,440,000 $103,200,000 none 20 years 15 years On January 1 of the current year, Oberon amended the plan to provide dental benefits. The actuary determines that the cost of making the amendment increases the APBO by $8,850,000. Management chooses to amortize this amount on a straight-line basis. The service cost is $52,000,000. The appropriate interest rate is 10%. Required: Calculate the postretirement benefit expense for the current year. (Round your answers to the nearest thousands of dollars.) ($ in thousands) Service cost Interest cost Return on plan assets $ 52,000 104,085 0 Amortization of prior service cost 590 Amortization of net loss 522 Postretirement benefit expense $ 157,197
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