Lender 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 calendar year, the following plan - related data were available. APBO balance $ 159,000,000 Fair value of plan assets none Average remaining service period to retirement 25 years Average remaining service period to full eligibility 20 years On January 1 of the current year, Lender amends the plan to provide dental benefits. The actuary determines that the cost of making the amendment increases the APBO by $29,000,000. Management chooses to amortize this amount on a straight-line basis. The service cost is $49,000,000. The appropriate interest rate is 10%. Required: Calculate the postretirement benefit expense for the current year.

Lender 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 calendar year, the following plan - related data were available. APBO balance $ 159,000,000 Fair value of plan assets none Average remaining service period to retirement 25 years Average remaining service period to full eligibility 20 years On January 1 of the current year, Lender amends the plan to provide dental benefits. The actuary determines that the cost of making the amendment increases the APBO by $29,000,000. Management chooses to amortize this amount on a straight-line basis. The service cost is $49,000,000. The appropriate interest rate is 10%. Required: Calculate the postretirement benefit expense for the current year.

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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