GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
9th Edition
ISBN: 9781260089042
Author: J. David Spiceland
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 17, Problem 17.24E
(1)
To determine
Other postretirement benefits: The postretirement benefits which are provided by employers, other than pensions, like medical insurance, life insurance, and legal services, and healthcare benefits, are referred to as other postretirement benefits.
The following are the ways to measure other postretirement benefits:
- Expected postretirement benefit obligation (EPBO): This is the present value of future retirement benefits, which is estimated to be received by the participants.
- Accumulated postretirement benefit obligation (APBO): This is the portion of EPBO recognized by the employee till date.
To determine: EPBO at the end of 2018
(2)
To determine
APBO at the end of 2018
(3)
To determine
EPBO at the end of 2019
(4)
To determine
APBO at the end of 2019
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Exercise 17-25 (Algo) Postretirement benefits; determine APBO, service cost, interest cost; prepare
journal entry [LO17-10, 17-11]
The following data are available pertaining to Household Appliance Company's retiree health care plan for 2024:
Number of employees covered
Years employed as of January 1, 2024
Attribution period
2
2 [each]
25 years
Expected postretirement benefit obligation, January 1
Expected postretirement benefit obligation, December 31
Interest rate
Funding
Required:
1. What is the accumulated postretirement benefit obligation at the beginning of 2024?
$ 56,000
$ 58,800
5%
none
16. Southeast Technology provides postretirement health care benefits to employees. On January 1, 2021, the following plan-related data were available:
($ in thousands)
Prior service cost—originated in 2016
$
50
Accumulated postretirement benefit obligation
530
Fair value of plan assets
none
Average remaining service period to retirement
20 years (same in previous 10 years)
Average remaining service period to full eligibility
15 years (same in previous 10 years)
On January 1, 2021, Southeast amends the plan in response to spiraling health care costs. The amendment establishes an annual maximum of $3,000 for medical benefits that the plan will provide. The actuary determines that the effect of this amendment is to decrease the APBO by $80,000. Management amortizes prior service cost on a straight-line basis. The interest rate is 8%. The service cost for 2021 is $114,000. Required:1. Complete the below table to calculate the prior service cost…
J
The following information relates to the defined benefit pension plan for the Nicola Company for the year ending December 31, 2020.
Defined benefit obligation, January 1
P4,600,000
Defined benefit obligation, Dec. 31
4,729,000
Fair value of plan assets, January 1
5,035,000
Fair value of plan assets, Dec. 31
5,565,000
Expected return on plan assets
450,000
Employer contributions
425,000
Benefits paid to retirees
390,000
Settlement rate
10%
Service cost for the year would be
Group of answer choices
P94,000
P59,000
P390,000
P129,000
Chapter 17 Solutions
GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
Ch. 17 - Prob. 17.1QCh. 17 - Prob. 17.2QCh. 17 - Prob. 17.3QCh. 17 - What is the vested benefit obligation?Ch. 17 - Prob. 17.5QCh. 17 - Prob. 17.6QCh. 17 - Name three events that might change the balance of...Ch. 17 - Prob. 17.8QCh. 17 - Prob. 17.9QCh. 17 - Prob. 17.10Q
Ch. 17 - The return on plan assets is the increase in plan...Ch. 17 - Define prior service cost. How is it reported in...Ch. 17 - Prob. 17.13QCh. 17 - Is a companys PBO reported in the balance sheet?...Ch. 17 - What two components of pension expense may be...Ch. 17 - Prob. 17.16QCh. 17 - Evaluate this statement: The excess of the actual...Ch. 17 - Prob. 17.18QCh. 17 - TFC Inc. revises its estimate of future salary...Ch. 17 - Prob. 17.20QCh. 17 - Prob. 17.21QCh. 17 - Prob. 17.22QCh. 17 - The components of postretirement benefit expense...Ch. 17 - The EPBO for Branch Industries at the end of 2018...Ch. 17 - Prob. 17.25QCh. 17 - Prob. 17.26QCh. 17 - Prob. 17.1BECh. 17 - Prob. 17.2BECh. 17 - Prob. 17.3BECh. 17 - Prob. 17.4BECh. 17 - Prob. 17.5BECh. 17 - Prob. 17.6BECh. 17 - Prob. 17.7BECh. 17 - Prob. 17.8BECh. 17 - Prob. 17.9BECh. 17 - Prob. 17.10BECh. 17 - Net gain LO176 The projected benefit obligation...Ch. 17 - Prob. 17.12BECh. 17 - Prob. 17.13BECh. 17 - Postretirement benefits; determine the APBO and...Ch. 17 - Prob. 17.15BECh. 17 - Prob. 17.1ECh. 17 - Prob. 17.2ECh. 17 - Prob. 17.3ECh. 17 - Prob. 17.4ECh. 17 - Prob. 17.5ECh. 17 - Prob. 17.6ECh. 17 - Prob. 17.7ECh. 17 - Prob. 17.8ECh. 17 - Prob. 17.9ECh. 17 - Prob. 17.10ECh. 17 - Prob. 17.11ECh. 17 - PBO calculations; ABO calculations; present value...Ch. 17 - Prob. 17.13ECh. 17 - Prob. 17.14ECh. 17 - Prob. 17.15ECh. 17 - Prob. 17.16ECh. 17 - Prob. 17.17ECh. 17 - Prob. 17.18ECh. 17 - Prob. 17.19ECh. 17 - Prob. 17.20ECh. 17 - Prob. 17.21ECh. 17 - Prob. 17.22ECh. 17 - Prob. 17.23ECh. 17 - Prob. 17.24ECh. 17 - Prob. 17.25ECh. 17 - Prob. 17.26ECh. 17 - Prob. 17.27ECh. 17 - Prob. 17.28ECh. 17 - Prob. 17.29ECh. 17 - Prob. 17.30ECh. 17 - Prob. 17.31ECh. 17 - Prob. 17.32ECh. 17 - Prob. 17.33ECh. 17 - Prob. 17.1PCh. 17 - PBO calculations; present value concepts LO173...Ch. 17 - Service cost, interest, and PBO calculations;...Ch. 17 - Prob. 17.4PCh. 17 - Prob. 17.5PCh. 17 - Prob. 17.6PCh. 17 - Determining the amortization of net gain LO176...Ch. 17 - Prob. 17.8PCh. 17 - Prob. 17.9PCh. 17 - Prob. 17.10PCh. 17 - Prob. 17.11PCh. 17 - Prob. 17.12PCh. 17 - Prob. 17.13PCh. 17 - Prob. 17.14PCh. 17 - Prob. 17.15PCh. 17 - Prob. 17.16PCh. 17 - Prob. 17.17PCh. 17 - Prob. 17.18PCh. 17 - Prob. 17.19PCh. 17 - Prob. 17.20PCh. 17 - Prob. 17.21PCh. 17 - Prob. 17.1BYPCh. 17 - Prob. 17.2BYPCh. 17 - Prob. 17.3BYPCh. 17 - Prob. 17.5BYPCh. 17 - Prob. 17.6BYPCh. 17 - Prob. 17.7BYPCh. 17 - Prob. 17.8BYPCh. 17 - Prob. 17.9BYPCh. 17 - Prob. 17.11BYPCh. 17 - Prob. 1CCTCCh. 17 - Prob. 1CCIFRS
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Question 17 Swifty Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid. 1. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,500. 2. The company’s funding policy requires a contribution to the pension trustee amounting to $144,729 for 2020. 3. As of January 1, 2020, the company had a projected benefit obligation of $908,100, an accumulated benefit obligation of $802,100, and a debit balance of $400,100 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $601,200 at the beginning of the year. The actual and expected return on plan assets was $54,100. The settlement rate was 9%. No gains or losses occurred in 2020 and no benefits were paid. 4. Amortization of prior service cost was $50,500 in 2020. Amortization of net gain or loss was not required in 2020. (c)…arrow_forwardQuestion 25 Carla Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2017. 1. The actuarial present value of future benefits earned by employees for services rendered in 2017 amounted to $82,000. 2. The company’s funding policy requires a contribution to the pension trustee amounting to $151,000 for 2017. 3. As of January 1, 2017, the company had a projected benefit obligation of $1,603,000 and a debit balance of $429,000 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $1,373,000 at the beginning of the year. The actual and expected return on plan assets was $63,000. The settlement rate was 5%. No gains or losses occurred in 2017 and no benefits were paid. 4. Amortization of prior service cost was $85,800 in 2017. Amortization of net gain or loss was not required in 2017. (c) Indicate the amounts that would be reported on the income…arrow_forwardExercise 11-10 (Algorithmic) (LO. 5) Myers, who is single, reports compensation income of $71,600 in 2022. He is an active participant in his employer's qualified retirement plan. Myers contributes $6,000 to a traditional IRA. Click here to access Exhibit 11.2 Phaseout of IRA Deduction of an Active Participant Do not round any division. If required, round your answer to the nearest dollar. of the $6,000 contribution, how much can Myers deduct?arrow_forward
- 14. The following data are available pertaining to Household Appliance Company's retiree health care plan for 2021: Number of employees covered 2 Years employed as of January 1, 2021 3 [each] Attribution period 25 years Expected postretirement benefit obligation, Jan. 1 $ 50,000 Expected postretirement benefit obligation, Dec. 31 $ 53,000 Interest rate 6 % Funding none Required:1. What is the accumulated postretirement benefit obligation at the beginning of 2021?2. What is interest cost to be included in 2021 postretirement benefit expense?3. What is service cost to be included in 2021 postretirement benefit expense?4. Prepare the journal entry to record the postretirement benefit expense for 2021.arrow_forwardQUESTION 3 Bacon Bad is a national diner that has set up a defined benefit pension plan for its employees. The company uses IFRS and has provided you with the following information pertaining to its pension plan: Pension obligation, December 31,2021 - $6854203 Plan assets, December 31, 2021 - $5906519 Interest rate on pension obligations - 3% Current service cost for the year (accrued at the end of the year) - $598059 Improvement in pension plan, effective on January 1, 2022 - $62000 Actuarial gain on change in assumptions - $0 Expected retum on plan assets -3% of plan assets Actual return on plan assets - $271186 Amounts remitted by employer to pension trust on January 1,2022 - $668416 Payments we do not need payment to retireearrow_forwardPharoah Inc. has a defined-benefit pension plan covering its 248 employees. Pharoah agrees to amend its pension benefits. The prior service cost associated with the amendment is $180230. The employees are grouped according to expected years of retirement, as follows: Group A B C D Number of Employees 32 62 $66712 O $41426 O $45058 O $5632 102 52 Expected Retirement on December 31 2025 2026 2027 2028 Using the straight-line amortization over average remaining service life approach, what is the annual amount of Prior Service Cost amortization recognized in 2027?arrow_forward
- Question 16# Buffalo Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances relate to this plan. Plan assets $463,200 Projected benefit obligation 578,200 Pension asset/liability 115,000 Accumulated OCI (PSC) 100,100 Dr. As a result of the operation of the plan during 2020, the following additional data are provided by the actuary. Service cost $86,600 Settlement rate, 8% Actual return on plan assets 53,200 Amortization of prior service cost 18,000 Expected return on plan assets 50,200 Unexpected loss from change in projected benefit obligation, due to change in actuarial predictions 79,600 Contributions 99,600 Benefits paid retirees 85,100 (b) Prepare the journal entry for pension expense for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the…arrow_forwardQuestion 16## Buffalo Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances relate to this plan. Plan assets $463,200 Projected benefit obligation 578,200 Pension asset/liability 115,000 Accumulated OCI (PSC) 100,100 Dr. As a result of the operation of the plan during 2020, the following additional data are provided by the actuary. Service cost $86,600 Settlement rate, 8% Actual return on plan assets 53,200 Amortization of prior service cost 18,000 Expected return on plan assets 50,200 Unexpected loss from change in projected benefit obligation, due to change in actuarial predictions 79,600 Contributions 99,600 Benefits paid retirees 85,100 Also please help me answer part B. (b) Prepare the journal entry for pension expense for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is…arrow_forwardExercise 17-10 (Algo) Determine pension expense Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2021, Abbott and Abbott received the following information: Projected Benefit Obligation Balance, January 1 Service cost ($ in millions) $125 22 Interest cost Benefits paid 15 (8) Balance, December 31 $154 Plan Assets Balance, January 1 Actual return on plan assets Contributions 2021 Benefits paid Balance, December 31 $75 10 22 (8) $99 The expected long-term rate of return on plan assets was 12%. There was no prior service cost and a negligible net loss-AOCI on January 1, 2021. Required: 1. Determine Abbott and Abbott's pension expense for 2021. 2 Prepare the journal entries to record Abbott and Abbott's (a) pension expense, (b) fundina, and (c) pavment for 2021.arrow_forward
- Comprehensive Problem 12-51 (LO 12-1, LO 12-2, LO 12-3) (Algo) Santini's new contract for 2023 indicates the following compensation and benefits: Benefit Description Salary Health insurance Restricted stock grant Bonus Hawaii trip Group-term life insurance Parking ($336 per month) Amount $ 131,500 10,500 2,500 5,300 4,300 Santini is 54 years old at the end of 2023. He is single and has no dependents. Assume that the employer matches $1 for $1 for the first $6,000 that the employee contributes to his 401(k) during the year. The restricted stock grant is 500 shares granted when the market price was $5 per share. Assume that the stock vests on December 31, 2023, and that the market price on that date is $15.00 per share. Also assume that Santini is willing to make any elections to reduce equity-based compensation taxes. The Hawaii trip was given to him as the outstanding salesperson for 2022. The group-term life policy gives him $150,000 of coverage. Assume that Santini does not itemize…arrow_forward3 continue b... The following information is available for the pension plan of Vaughn Company for the year 2020. Actual and expected return on plan assets $ 14,700 Benefits paid to retirees 40,800 Contributions (funding) 81,100 Interest/discount rate 10 % Prior service cost amortization 7,600 Projected benefit obligation, January 1, 2020 458,000 Service cost 63,900 Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount…arrow_forwardEA16. LO 12.5 An employee and employer cost-share pension plan contributions and health insurance premium payments. If the employee covers 35% of the pension plan contribution and 25% of the health insurance premium, what would be the employee's total benefits responsibility if the total pension contribution was $900, and the health insurance premium was $375? Include the journal entry representing the payroll benefits accumulation for the employer in the month of February. Solution What would be the employee's total benefits responsibility?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education