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 2023. As of the end of 2024, the actuary estimates the total net cost of providing health care benefits to employees during their retirement years to have a present value of $85,000. Each of the employees will become fully eligible for benefits after 23 more years of service but aren't expected to retire for 35 more years. The interest rate is 7%. Required: 1. What is the expected postretirement benefit obligation at the end of 2024? 2. What is the accumulated postretirement benefit obligation at the end of 2024? 3. What is the expected postretirement benefit obligation at the end of 2025? 4. What is the accumulated postretirement benefit obligation at the end of 2025? 1. Expected postretirement benefit obligation 2024 2. Accumulated postretirement benefit obligation 2024 3. Expected postretirement benefit obligation 2025 4. Accumulated postretirement benefit obligation 2025

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 2023. As of the end of 2024, the actuary estimates the total net cost of providing health care benefits to employees during their retirement years to have a present value of $85,000. Each of the employees will become fully eligible for benefits after 23 more years of service but aren't expected to retire for 35 more years. The interest rate is 7%. Required: 1. What is the expected postretirement benefit obligation at the end of 2024? 2. What is the accumulated postretirement benefit obligation at the end of 2024? 3. What is the expected postretirement benefit obligation at the end of 2025? 4. What is the accumulated postretirement benefit obligation at the end of 2025? 1. Expected postretirement benefit obligation 2024 2. Accumulated postretirement benefit obligation 2024 3. Expected postretirement benefit obligation 2025 4. Accumulated postretirement benefit obligation 2025

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 13E

See similar textbooks

Similar questions

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 2020. As of the end of 2021, 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 2021?2. What is the accumulated postretirement benefit obligation at the end of 2021?3. What is the expected postretirement benefit obligation at the end of 2022?4. What is the accumulated postretirement benefit obligation at the end of 2022?
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 2023. As of the end of 2024, the actuary estimates the total net cost of providing health care benefits to employees during their retirement years to have a present value of $84,000. Each of the employees will become fully eligible for benefits after 22 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 2024? 2. What is the accumulated postretirement benefit obligation at the end of 2024? 3. What is the expected postretirement benefit obligation at the end of 2025? 4. What is the accumulated postretirement benefit obligation at the end of 2025? 1. Expected postretirement benefit obligation 2024 2. Accumulated postretirement benefit obligation 2024 3. Expected postretirement benefit obligation 2025…
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?
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 ____ _____
Prince Distribution Inc. 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 2021, Jim Lukawitz is 41. He was hired by Prince at age 35 (6 years ago) and is expected to retire at age 62. The expected postretirement benefit obligation for Lukawitz at the end of 2021 is $58,000 and $61,000 at the end of 2022. Calculate the accumulated postretirement benefit obligation at the end of 2021 and 2022 and the service cost for 2021 and 2022, as pertaining to Lukawitz.
Prince Distribution Inc. has an unfunded postretirement benefit plan. Medical care and life insurance benefits areprovided to employees who render 10 years service and attain age 55 while in service. At the end of 2018, JimLukawitz is 31. He was hired by Prince at age 25 (6 years ago) and is expected to retire at age 62. The expectedpostretirement benefit obligation for Lukawitz at the end of 2018 is $50,000 and $54,000 at the end of 2019.Calculate the accumulated postretirement benefit obligation at the end of 2018 and 2019 and the service cost for2018 and 2019, as pertaining to Lukawitz.
On January 1, 2019, Vasby Software Company adopted a healthcare plan for its retired employees. To determine eligibility for benefits, Vasby retroactively gives credit to the date of hire for each employee. The service cost for 2019 is $7,840. The plan is not funded, and the discount rate is 10%. All employees were hired at age 28 and become eligible for full benefits at age 58. Employee C was paid $6,510 for postretirement healthcare benefits in 2019. On December 31, 2019, the accumulated postretirement benefit obligation for Employees B and C were $71,270 and $42,010, respectively. Additional information on January 1, 2019, is as follows: Employee Status Age Expected Retirement Age Accumulated Postretirement Benefit Obligation 1. Employee 31 65 $9,300 2. Employee 55 65 75,600 3. Retired 67 — 50,700 $135,600 Required: 1. Compute the OPRB expense for 2019 if Vasby uses the average remaining service life to amortize the prior service cost.…
The EPBO for Branch Industries at the end of 2018 was determined by the actuary to be $20,000 as it relates toemployee Will Lawson. Lawson was hired at the beginning of 2004. He will be fully eligible to retire with health carebenefits after 15 more years but is expected to retire in 25 years. What is the APBO as it relates to Will Lawson?
On January 1, 2019, Lee Software Company adopted a healthcare plan for its retired employees. To determine eligibility for benefits, Lee retroactively gives credit to the date of hire for each employee. The service cost for 2019 is $8,130. The plan is not funded, and the discount rate is 9%. All employees were hired at age 28 and become eligible for full benefits at age 58. Employee C was paid $6,950 for postretirement healthcare benefits in 2019. On December 31, 2019, the accumulated postretirement benefit obligation for Employees B and C were $73,520 and $40,160, respectively. Additional information on January 1, 2019, is as follows: Employee Status Age Expected Retirement Age Accumulated Postretirement Benefit Obligation 1. Employee 31 65 $9,900 2. Employee 55 65 88,800 3. Retired 67 — 44,400 $143,100 Required: 1. Compute the OPRB expense for 2019 if Lee uses the average remaining service life to amortize the prior service cost. 2.…
Gorky-Park Corporation provides postretirement health care benefits to employees who provide at least 12 years of service and reach age 62 while in service. On January 1, 2024, the following plan-related data were available: Accumulated postretirement benefit obligation Fair value of plan assets Average remaining service period to retirement Average remaining service period to full eligibility ($ in millions) $ 130 None 25 years (same in previous 10 years) 20 years (same in previous 10 years) On January 1, 2024, 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 $20 million. Management chooses to amortize the prior service cost on a straight-line basis. The service cost for 2024 is $38 million. The interest rate is 9%. Required: 1. Calculate the postretirement benefit expense for 2024. 2. Prepare the journal entry to record the…
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 2020. As of the end of 2021, the actuary estimates the total net cost of providing health care benefits to employees during their retirement years to have a present value of $66,000. Each of the employees will become full eligible for benefits after 20 more years of service but aren't expected to retire for 35 more years. The interest rate is 4%. Required: 1. What is the expected postretirement benefit obligation at the end of 2021? 2. what is the accumulated postretirement benefit obligation at the end of 2021? 3. what is the expected postretirement benefit obligation at the end of 2022? 4. What is the accumulated postretirement benefit obligation at the end of 2022? 1. Expected postretirement benefit obligation 2021 _______ 2. Accumulated postretirement benefit obligation 2021 _______ 3. Expected…
Frazier Refrigeration amended its defined benefit pension plan on December 31, 2021, to increase retirement benefits earned with each service year. The consulting actuary estimated the prior service cost incurred by making the amendment retroactive to prior years to be $110,000. Frazier’s 100 present employees are expected to retire at the rate of approximately 10 each year at the end of each of the next 10 years.Required:1. Using the service method, calculate the amount of prior service cost to be amortized to pension expense in each of the next 10 years.2. Using the straight-line method, calculate the amount of prior service cost to be amortized to pension expense in each of the next 10 years.