A postretirement plan promises health care coverage for all employees who retire after age 62 and complete service of 15 years. As of January 1, 2020, one 50-year old participant has rendered services for 8 years, and is expected to retire at age 65. The following amounts pertain to th participant's benefits. Present value of postretirement benefit cash flow stream at the date of retirement $30,000 Present value of postretirement cash flow stream on Jan. 1, 2020 $4,000 What is the value of the accumulated postretirement benefit obligation (APBO) on January 1, 2020?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A postretirement plan promises health care coverage for all employees who retire after age 62 and complete service of 15 years. As of January 1, 2020, one 50-year old participant has rendered services for 8 years, and is expected to retire at age 65. The following amounts pertain to the
participant's benefits.
Present value of postretirement benefit cash flow stream at the date of retirement $30,000
Present value of postretirement cash flow stream on Jan. 1, 2020
$4,000
What is the value of the accumulated postretirement benefit obligation (APBO) on January 1, 2020?
Select one:
O
O
O
a. $2,133
b. $1,391
c. $1,600
d. $12,000
Transcribed Image Text:A postretirement plan promises health care coverage for all employees who retire after age 62 and complete service of 15 years. As of January 1, 2020, one 50-year old participant has rendered services for 8 years, and is expected to retire at age 65. The following amounts pertain to the participant's benefits. Present value of postretirement benefit cash flow stream at the date of retirement $30,000 Present value of postretirement cash flow stream on Jan. 1, 2020 $4,000 What is the value of the accumulated postretirement benefit obligation (APBO) on January 1, 2020? Select one: O O O a. $2,133 b. $1,391 c. $1,600 d. $12,000
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