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 $37,000 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 /= 4% is 11.11839.The PV of $1 where n = 2 and /= 4% is 0.92456.With respect to Ralph, what is the interest cost to be included in Oregon's 2025 postretirement benefit expense, rounded to the nearest dollar?Multiple ChoiceО$14,434О$14,509О$15,398None of these answer choices are correctActivate WirGo to Settings to

Let's break down the information provided:1. Eligibility for Retirement Benefits:o Oregon Company…

Answered: Oregon Company's employees are eligible…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Classified Electronics has an unfunded retiree health care plan. Each of the company’s three employees has been with the firm since its inception at the beginning of 2015. As of the end of 2016, the actuary estimates the total net cost of providing health care benefits to employees during their retirement years to have a present value of $72,000. Each of the employees will become fully eligible for benefits after 28 more years of service but aren’t expected to retire for 35 more years. The interest rate is 6%. Required: 1. What is the expected postretirement benefit obligation at the end of 2016? 2. What is the accumulated postretirement benefit obligation at the end of 2016? 3. What is the expected postretirement benefit obligation at the end of 2017? 4. What is the accumulated postretirement benefit obligation at the end of 2017?
On January 1, 2025, Barbara Brown signed an agreement, covering 5 years, to operate as a franchisee of Ivanhoe Inc. for an initial franchise fee of $51,000. The amount of $11,000 was paid when the agreement was signed, and the balance is payable in five annual payments of $8,000 each, beginning January 1, 2026. The agreement provides that the down payment is nonrefundable and that no future services are required of the franchisor once the franchise commences operations on April 1, 2025. Barbara Brown's credit rating indicates that she can borrow money at 7% for a loan of this type. Click here to view the factor table. Prepare journal entries for Ivanhoe for 2025-related revenue for this franchise arrangement. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the…
A corporation's pension plan provides a lifetime annual income to its employees upon retirement at age 65. The plan provides 4% for each year of service of the employee's salary upon retirement. Those who retire before 65 have their benefit reduced by 1.4% for each year before 65 that they retire. Russ retires at age 60 with 26 years of service. If his salary upon retirement is $50,732, what is his annual pension benefit? Round your answer to the nearest dollar.
L Company is evaluating amendments to its pensions plans. Plan 1 covers its salaried employees and Plan 2 provides benefits to its hourly workers. On January 1, 2016, L will grant employees in Plan 2 additional pension benefits of P318,000 based on their past service. Employees in this plan have an average period to vesting of 6 years. Plan 1 will be amended to reduce benefits by P160,000 (in exchange, employees will receive increased contributions to the company’s defined contribution plan). Employees in this plan have an average period to vesting of 5 years. What is the total past service cost included in pension expense 2016?
Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.2% x service years x final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2010 and is expected to retire at the end of 2044 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $95,000 at the end of 2024 and the company's actuary projects her salary to be $305,000 at retirement. The actuary's discount rate is 9%. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) At the beginning of 2025, the pension formula was amended to: 1.40% * Service years * Final year's salary The amendment was made retroactive to apply the increased benefits to prior service years. Required: 1. What is the company's prior service cost at the beginning of 2025 with respect to Davenport after the amendment described above? 2. Since the amendment occurred at…
The XYZ corporation pension plan provides a lifetime annual income to its employees upon retirement at age 65. The plan provides 4% for each year of service of the employee's salary upon retirement. Moreover, those retiring after 65 have their benefit increased by 1.1% for each year beyond 65 that they work. Caitlin retires at age 73 with 16 years of service. If her salary upon retirement is $60, 106, what is her annual pension benefit?
Beginning 2019, Maigo and Maika Company grant 15 days of vacation a year to each of the 100 employees if they are still employed at the end of the year. The vacation accumulates and may be taken starting January 1 of the following year. The employees work 8 hours a day. The rate for all employees during 2019, 2020, and 2021 are P70, P75 and P80 per hour, respectively. During 2020 and 2021, the employees each used an average of 5 and 8 vacation days, respectively. The entity’s policy is to record the liability existing at the end of each year at the wage rate for the current year. 1. What amount should be reported as vacation liability on December 31, 2019, 2020 and 2021?2. What amount should be reported as vacation pay expense on December 31, 2019, 2020, and 2021, respectively?
Prince Distribution Incorporated has an unfunded postretirement benefit plan. Medical care and life insurance benefits are provided to employees who render 10 years service and attain age 55 while in service. At the end of 2024, Jim Lukawitz is 31. He was hired by Prince at age 25 (6 years ago) and is expected to retire at age 62. The expected postretirement benefit obligation for Lukawitz at the end of 2024 is $50,000 and $54,000 at the end of 2025. Calculate the accumulated postretirement benefit obligation at the end of 2024 and 2025 and the service cost for 2024 and 2025, as pertaining to Lukawitz. Note: Enter your answers in whole dollar amount. Round your final answers to the nearest whole dollar. APBO Service 2024 ____ _____ 2025 ____ _____
Alicia has been working for JMM Corporated for 32 years. Alicia participates in JMM’s defined benefit plan. Under the plan, for every year of service for JMM, she is to receive 2 percent of the average salary of her three highest consecutive calendar years of compensation from JMM. She retired on January 1, 2021. Before retirement, her annual salary was $570,000, $600,000, and $630,000 for 2018, 2019, and 2020. What is the maximum benefit Alicia can receive in 2021?
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' rimbursement for health care services of $21,000 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 3%. The plan is unfunded. The PV of an ordinary annuity of $1 where n-15 and/-3% is 1193794 The PV of $1 where n-2 and/-3% is 094260 With respect to Ralph, what is Oregon's expected postretirement beneft obligation (EPBO) et the end of 2024, rounded to the nearest dolar? Muple Choice O O O $122.195 $236,307 $60 1764.400
DnE Company has established a defined benefit pension ere equal to the employee's highest lifetime salary multiplied by 2% multiplied by number of years with the entity. On December 31, 2017, the employee had worked for DnE Company for 10 years. The salary in 2017 was P500,000, The employee is expected to retire in 25 years and the salary increases are expected to average 3% per year during that period. The employee is expected to live for 15 years after retiring and will receive the first annual pension payment one year after retirement. The discount rate is 8%. The relevant present value and future value factors are: •Future value of 1 at 3% for 25 periods - 2.094 •PV of an ordinary annuity of 1 at 8% for 15 periods - 8.559 •PV of 1 at 8% for 25 periods - 0.146 What is the projected benefit obligation on December 31, 2017? A.) 209,400 B.) 261,669 C.) 100,000 D.) 124,961
The EPBO for Branch Industries at the end of 2016 was determined by the actuary to be $20,000 as it relates to employee Will Lawson. Lawson was hired at the beginning of 2002. He will be fully eligible to retire with health care benefits after 15 more years but is expected to retire in 25 years. What is the APBO as it relates to Will Lawson?

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