The following data are available pertaining to Household Appliance Company's retiree health care plan for 2021: Number of employees covered 2 Years employed as of January 1, 2021 3 [each] Attribution period 25 years Expected postretirement benefit obligation, Jan. 1 $ 50,000 Expected postretirement benefit obligation, Dec. 31 $ 53,000 Interest rate 6 % Funding none Required: 1. What is the accumulated postretirement benefit obligation at the beginning of 2021? 2. What is interest cost to be included in 2021 postretirement benefit expense? 3. What is service cost to be included in 2021 postretirement benefit expense?
14. The following data are available pertaining to Household Appliance Company's retiree health care plan for 2021:
| Number of employees covered | 2 | ||
| Years employed as of January 1, 2021 | 3 | [each] | |
| Attribution period | 25 | years | |
| Expected postretirement benefit obligation, Jan. 1 | $ | 50,000 | |
| Expected postretirement benefit obligation, Dec. 31 | $ | 53,000 | |
| Interest rate | 6 | % | |
| Funding | none | ||
Required:
1. What is the accumulated postretirement benefit obligation at the beginning of 2021?
2. What is interest cost to be included in 2021 postretirement benefit expense?
3. What is service cost to be included in 2021 postretirement benefit expense?
4. Prepare the
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The present value of the retirement benefits is the referred to as the pension benefit obligation. It is determined to estimate the future pension obligation.
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