Oregon Company's employees are eligible for retirement with benefits at the end of the year in which both age 60 is attained and they have completed 35 years of service. The benefits provide 15 years' reimbursement for health care services of $39,000 annually, beginning one year from the date of retirement. Ralph Young was hired at the beginning of 1988 by Oregon after turning age 22 and is expected to retire at the end of 2026 (age 60). The discount rate is 4%. The plan is unfunded. The PV of an ordinary annuity of $1 where n = 15 and i = 4% is 11.11839. The PV of $1 where n = 2 and i = 4% is 0.92456. With respect to Ralph, what is the service cost to be included in Oregon's 2024 postretirement benefit expense, rounded to the nearest dollar? Multiple Choice $6,881 S 12,382 $39,000 $10, 280
Oregon Company's employees are eligible for retirement with benefits at the end of the year in which both age 60 is attained and they have completed 35 years of service. The benefits provide 15 years' reimbursement for health care services of $39,000 annually, beginning one year from the date of retirement. Ralph Young was hired at the beginning of 1988 by Oregon after turning age 22 and is expected to retire at the end of 2026 (age 60). The discount rate is 4%. The plan is unfunded. The PV of an ordinary annuity of $1 where n = 15 and i = 4% is 11.11839. The PV of $1 where n = 2 and i = 4% is 0.92456. With respect to Ralph, what is the service cost to be included in Oregon's 2024 postretirement benefit expense, rounded to the nearest dollar? Multiple Choice $6,881 S 12,382 $39,000 $10, 280
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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![Oregon Company's employees are eligible for retirement with benefits at the end of the year in which both age 60 is attained and they have completed 35 years
of service. The benefits provide 15 years' reimbursement for health care services of $39,000 annually, beginning one year from the date of retirement. Ralph
Young was hired at the beginning of 1988 by Oregon after turning age 22 and is expected to retire at the end of 2026 (age 60). The discount rate is 4 %. The
plan is unfunded. The PV of an ordinary annuity of $1 where n = 15 and i = 4% is 11.11839. The PV of $1 where n = 2 and i = 4% is 0.92456. With respect
to Ralph, what is the service cost to be included in Oregon's 2024 postretirement benefit expense, rounded to the nearest dollar? Multiple Choice $6,881 $
12, 382 $39,000 $10, 280](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0fc1c9f7-87ce-4690-9c77-a995e01d6cf2%2F904cc58a-f742-43b2-8a30-3c05d2ef78d4%2F9vosj28_processed.png&w=3840&q=75)
Transcribed Image Text:Oregon Company's employees are eligible for retirement with benefits at the end of the year in which both age 60 is attained and they have completed 35 years
of service. The benefits provide 15 years' reimbursement for health care services of $39,000 annually, beginning one year from the date of retirement. Ralph
Young was hired at the beginning of 1988 by Oregon after turning age 22 and is expected to retire at the end of 2026 (age 60). The discount rate is 4 %. The
plan is unfunded. The PV of an ordinary annuity of $1 where n = 15 and i = 4% is 11.11839. The PV of $1 where n = 2 and i = 4% is 0.92456. With respect
to Ralph, what is the service cost to be included in Oregon's 2024 postretirement benefit expense, rounded to the nearest dollar? Multiple Choice $6,881 $
12, 382 $39,000 $10, 280
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