Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
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Chapter 11, Problem 10QS
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Riverrun Co. provides medical care and insurance benefits to its retirees. In the current year, Riverrun agrees to pay $5,500 for medical insurance and contribute an additional $9,000 to a retirement program. Record the entry for these accrued (but unpaid) benefits on December 31.
On January 1, 2019, Fun Company adopted a healthcare plan for its retired employees. To determine eligibility for benefits, the company retroactively gives credit to the date of hire for each employee. The following information is available about the plan:
Service cost
$31,550
Accumulated postretirement benefit obligation (1/1/19)
114,000
Expected return on plan assets
0
Amortization of Prior service cost
11,400
Payments to retired employees during 2019
5,530
Interest rate
10%
Average remaining service period of active plan participants (1/1/19)
10 years
Required:
1.
Compute the OPRB expense for 2019 if the company uses the average remaining service life to amortize the prior service cost.
2.
Prepare all the required journal entries for 2019 if the plan is not funded.
An employer agrees to pay $14,800 for medical insurance and contribute an additional 5% of the employees' $148,000 gross salaries to a retirement program. The entry to record these accrued benefits is:
Chapter 11 Solutions
Principles of Financial Accounting.
Ch. 11 - On December 1, a company signed a 6,000, 90-day,...Ch. 11 - Prob. 2MCQCh. 11 - Prob. 3MCQCh. 11 - Prob. 4MCQCh. 11 - Prob. 5MCQCh. 11 - Prob. 1DQCh. 11 - Prob. 2DQCh. 11 - What are the three important questions concerning...Ch. 11 - Prob. 4DQCh. 11 - Prob. 5DQ
Ch. 11 - Prob. 6DQCh. 11 - Prob. 7DQCh. 11 - Prob. 8DQCh. 11 - Prob. 9DQCh. 11 - Prob. 10DQCh. 11 - Prob. 11DQCh. 11 - What amount of income tax is withheld from the...Ch. 11 - Prob. 13DQCh. 11 - Prob. 14DQCh. 11 - Prob. 15DQCh. 11 - Refer to Samsungs recent balance sheet in Appendix...Ch. 11 - Which of the following items are normally...Ch. 11 - Prob. 2QSCh. 11 - Prob. 3QSCh. 11 - Prob. 4QSCh. 11 - Prob. 5QSCh. 11 - Prob. 6QSCh. 11 - Prob. 7QSCh. 11 - Prob. 8QSCh. 11 - Prob. 9QSCh. 11 - Prob. 10QSCh. 11 - Prob. 11QSCh. 11 - Prob. 12QSCh. 11 - Prob. 13QSCh. 11 - Prob. 14QSCh. 11 - Prob. 15QSCh. 11 - Prob. 1ECh. 11 - Prob. 2ECh. 11 - Prob. 3ECh. 11 - Prob. 4ECh. 11 - Prob. 5ECh. 11 - Prob. 6ECh. 11 - Prob. 7ECh. 11 - Prob. 8ECh. 11 - Prob. 9ECh. 11 - Prob. 10ECh. 11 - Prob. 11ECh. 11 - Prob. 12ECh. 11 - Prob. 13ECh. 11 - Prob. 14ECh. 11 - Prob. 15ECh. 11 - Prob. 16ECh. 11 - Prob. 17ECh. 11 - Prob. 18ECh. 11 - Prob. 19ECh. 11 - Prob. 1APCh. 11 - Prob. 2APCh. 11 - Prob. 3APCh. 11 - Prob. 4APCh. 11 - Shown here are condensed income statements for two...Ch. 11 - Prob. 6APCh. 11 - Prob. 1BPCh. 11 - Prob. 2BPCh. 11 - Prob. 3BPCh. 11 - Prob. 4BPCh. 11 - Prob. 5BPCh. 11 - Entries for payroll transactions MLS Company has...Ch. 11 - Prob. 11SPCh. 11 - Prob. 1AACh. 11 - Prob. 2AACh. 11 - Prob. 3AACh. 11 - Beyond the Numbers Cameron Bly is a sales manager...Ch. 11 - Prob. 2BTNCh. 11 - Review the chapters opening feature about Tim...
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- 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.arrow_forwardA 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 participants benefits. Present value of postretirement benefit cash flow stream ut the date of retirement s30.000 Present value of postretirement cash flow stream an jan. 1, 2020 $4.000 What is the value of the accumulated postretirement benefit obligation (APBO) on January 1, 20207 Select one a. $2,133 b. $1.391 C.$1,600 d. $12.000arrow_forwardFrazier Refrigeration amended its defined benefit pension plan on December 31, 2018, to increase retirement benefits earned with each service year. The consulting actuary estimated the prior service cost incurred by making theamendment retroactive to prior years to be $110,000. Frazier’s 100 present employees are expected to retire at therate 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 ineach of the next 10 years.2. Using the straight-line method, calculate the amount of prior service cost to be amortized to pension expensein each of the next 10 years.arrow_forward
- Lawrence Company has a defined benefit pension plan. On December 31 of the current year (the end of the fiscal year), the actuary's report to the company contained the following information: Ending PBO, $115,000; benefits paid to retirees, $15,000; interest cost, $9,000. The discount rate applied to be the actuary was 9%. What was the service cost for the year?arrow_forwardStockton Labeling Company has a retiree health care plan. Employees become fully eligible for benefits after working for the company eight years. Stockton hired Misty Newburn on January 1, 2021. As of the end of 2021, the actuary estimates the total net cost of providing health care benefits to Newburn during her retirement years to have a present value of $18,000. The actuary’s discount rate is 10%.Required:Prepare a schedule that shows the EPBO, the APBO, the service cost, the interest cost, and the postretirement benefit expense for each of the years 2021–2028.arrow_forwardLouie Company has a defined benefit pension plan. On December 31 (the end of the fiscal year), the company received the PBO report from the actuary. The following information was included in the report ending PBO, $110,000; benefits paid to retirees, $10,000; Iinterest cost, $8,000. The discount rate applied by the actuary was 8%. What was the service cost for the year? Multiple Choice $18,000. $92,000. $2,000. $12,000. 19 of 39 Next > < Prev 7 Question no....pages Rook Airarrow_forward
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