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 $36 million. The interest rate is 8%. Required: 1. Calculate the postretirement benefit expense for 2021. 2. Prepare the journal entry to record the expense. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the postretirement benefit expense for 2021. ((Enter your answers in millions rounded to 1 decimal place (ie, 5,500,000 should be entered as 5.5).) ($ in millions)
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 $36 million. The interest rate is 8%. Required: 1. Calculate the postretirement benefit expense for 2021. 2. Prepare the journal entry to record the expense. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the postretirement benefit expense for 2021. ((Enter your answers in millions rounded to 1 decimal place (ie, 5,500,000 should be entered as 5.5).) ($ in millions)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
H1.
![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 $36 million. The interest rate is 8%.
Required:
1. Calculate the postretirement benefit expense for 2021.
2. Prepare the journal entry to record the expense.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Calculate the postretirement benefit expense for 2021. ((Enter your answers in millions rounded to 1 decimal place (i.e.,
5,500,000 should be entered as 5.5).)
Postretirement benefit expense
Show Transcribed Text
View transaction list
Journal entry worksheet
< 1
Record the expense.
($ in millions)
Note: Enter debits before credits.
Event
1
$
< Required 1
Complete this question by entering your answers in the tabs below.
Record entry
Required 1 Required 2
Prepare the journal entry to record the expense. (If no entry is required for a transaction/event, select "No journal entry required" in the
first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)
3
0.0
General Journal
Clear entry
Required 2 >
Debit
Credit
View general Journal](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F46e99256-23b1-4f76-abab-cc73201c4d66%2F42468e71-6b8c-498e-9aa6-dffc2464358d%2Fe3ffqba_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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 $36 million. The interest rate is 8%.
Required:
1. Calculate the postretirement benefit expense for 2021.
2. Prepare the journal entry to record the expense.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Calculate the postretirement benefit expense for 2021. ((Enter your answers in millions rounded to 1 decimal place (i.e.,
5,500,000 should be entered as 5.5).)
Postretirement benefit expense
Show Transcribed Text
View transaction list
Journal entry worksheet
< 1
Record the expense.
($ in millions)
Note: Enter debits before credits.
Event
1
$
< Required 1
Complete this question by entering your answers in the tabs below.
Record entry
Required 1 Required 2
Prepare the journal entry to record the expense. (If no entry is required for a transaction/event, select "No journal entry required" in the
first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)
3
0.0
General Journal
Clear entry
Required 2 >
Debit
Credit
View general Journal
![Exercise 17-29 (Algo) Postretirement benefits; determine and record expense [LO 17-11]
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, 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
Required:
1. Calculate the postretirement benefit expense for 2021.
2. Prepare the journal entry to record the expense.
Complete this question by entering your answers in the tabs below.
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 $36 million. The interest rate is 8%.
Required 1 Required 2
($ in millions)
$ 130
None
25 years (same in previous 10 yrs.)
20 years (same in previous 10 yrs.)
($ in millions)
Calculate the postretirement benefit expense for 2021. ((Enter your answers in millions rounded to 1 decimal place (i.e.,
5,500,000 should be entered as 5.5).)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F46e99256-23b1-4f76-abab-cc73201c4d66%2F42468e71-6b8c-498e-9aa6-dffc2464358d%2Fm2jhpw_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 17-29 (Algo) Postretirement benefits; determine and record expense [LO 17-11]
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, 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
Required:
1. Calculate the postretirement benefit expense for 2021.
2. Prepare the journal entry to record the expense.
Complete this question by entering your answers in the tabs below.
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 $36 million. The interest rate is 8%.
Required 1 Required 2
($ in millions)
$ 130
None
25 years (same in previous 10 yrs.)
20 years (same in previous 10 yrs.)
($ in millions)
Calculate the postretirement benefit expense for 2021. ((Enter your answers in millions rounded to 1 decimal place (i.e.,
5,500,000 should be entered as 5.5).)
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