Oberon Company provides postretirement health care benefits to employees who provide at least 10 years of service and reach the age of 65 while in service. On January 1 of the current year, the following plan-related data were available. Net loss-postretirement benefit plan APBO balance Fair value of plan assets Average remaining service period to retirement Average remaining service period to full eligibility $ 10,440,000 $103,200,000 none 20 years 15 years On January 1 of the current year, Oberon amended the plan to provide dental benefits. The actuary determines that the cost of making the amendment increases the APBO by $8,850,000. Management chooses to amortize this amount on a straight-line basis. The service cost is $52,000,000. The appropriate interest rate is 10%. Required: Calculate the postretirement benefit expense for the current year. (Round your answers to the nearest thousands of dollars.) ($ in thousands) Service cost Interest cost Return on plan assets $ 52,000 104,085 0 Amortization of prior service cost 590 Amortization of net loss 522 Postretirement benefit expense $ 157,197
Oberon Company provides postretirement health care benefits to employees who provide at least 10 years of service and reach the age of 65 while in service. On January 1 of the current year, the following plan-related data were available. Net loss-postretirement benefit plan APBO balance Fair value of plan assets Average remaining service period to retirement Average remaining service period to full eligibility $ 10,440,000 $103,200,000 none 20 years 15 years On January 1 of the current year, Oberon amended the plan to provide dental benefits. The actuary determines that the cost of making the amendment increases the APBO by $8,850,000. Management chooses to amortize this amount on a straight-line basis. The service cost is $52,000,000. The appropriate interest rate is 10%. Required: Calculate the postretirement benefit expense for the current year. (Round your answers to the nearest thousands of dollars.) ($ in thousands) Service cost Interest cost Return on plan assets $ 52,000 104,085 0 Amortization of prior service cost 590 Amortization of net loss 522 Postretirement benefit expense $ 157,197
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
Related questions
Question
![Oberon Company provides postretirement health care benefits to employees who provide at least 10 years of service and reach the
age of 65 while in service. On January 1 of the current year, the following plan-related data were available.
Net loss-postretirement benefit plan
APBO balance
Fair value of plan assets
Average remaining service period to retirement
Average remaining service period to full eligibility
$ 10,440,000
$103,200,000
none
20 years
15 years
On January 1 of the current year, Oberon amended the plan to provide dental benefits. The actuary determines that the cost of making
the amendment increases the APBO by $8,850,000. Management chooses to amortize this amount on a straight-line basis. The
service cost is $52,000,000. The appropriate interest rate is 10%.
Required:
Calculate the postretirement benefit expense for the current year. (Round your answers to the nearest thousands of dollars.)
($ in thousands)
Service cost
Interest cost
Return on plan assets
$
52,000
104,085
0
Amortization of prior service cost
590
Amortization of net loss
522
Postretirement benefit expense
$
157,197](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F06f7b891-a6fe-4179-a0b4-110b5276bf5f%2F1fbbca0e-754f-403d-a21a-7e6b0e2b52e0%2Fl7j1u0a_processed.png&w=3840&q=75)
Transcribed Image Text:Oberon Company provides postretirement health care benefits to employees who provide at least 10 years of service and reach the
age of 65 while in service. On January 1 of the current year, the following plan-related data were available.
Net loss-postretirement benefit plan
APBO balance
Fair value of plan assets
Average remaining service period to retirement
Average remaining service period to full eligibility
$ 10,440,000
$103,200,000
none
20 years
15 years
On January 1 of the current year, Oberon amended the plan to provide dental benefits. The actuary determines that the cost of making
the amendment increases the APBO by $8,850,000. Management chooses to amortize this amount on a straight-line basis. The
service cost is $52,000,000. The appropriate interest rate is 10%.
Required:
Calculate the postretirement benefit expense for the current year. (Round your answers to the nearest thousands of dollars.)
($ in thousands)
Service cost
Interest cost
Return on plan assets
$
52,000
104,085
0
Amortization of prior service cost
590
Amortization of net loss
522
Postretirement benefit expense
$
157,197
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning