| 4) Assume the actuary estimates the net cost of providing health care benefits to a particular employee during his retirement years to have a present value of $58,000. If the benefits relate to an estimated 25 years of service and six of those years have been completed: (Do not round your intermediate calculations.) | A | The EPBO would be $2,320. | | B | The APBO would be $2,320. | | C | The APBO would be $13,920. | | D | The EPBO would be $13,920. | The following data are for Guava Company's retiree health care plan for the current calendar year. | Number of employees covered | 5 | | Years employed as of January 1 | 4 (each) | | Attribution period | 20 years | | EPBO, January 1 | $62,000 | | EPBO, December 31 | $65,720 | | Interest rate | 6% | | Funding and plan assets | None | What is the service cost to be included in the current year's postretirement benefit expense? (Do not round your intermediate calculations and round your answer to the nearest whole dollar.) | A | $3,286. | | B | $3,900. | | C | $3,196. | | D | $3,100. | | On January 1, 2013, Wellburn Corporation leased an asset from Tabitha Company. The asset originally cost Tabitha $380,000. The lease agreement is an operating lease that calls for four annual payments beginning on January 1, 2013, in the amount of $32,000. The other three remaining payments will be made on January 1 of each subsequent year. Which of the following journal entries should Tabitha record on January 1, 2013? | A | | Cash | 32,000 | | | Rent revenue | | 32,000 | | | B | | Cash | 32,000 | | | Unearned rent revenue | | 32,000 | | | C | | Cash | 32,000 | | | Lease receivable | | 32,000 | | | D | | Cash | 32,000 | | | Rent expense | | 32,000 | | | |
