Problem 17-18 (Algo) Postretirement benefits; EPBO calculations; APBO calculations; components of postretirement benefit expense; present value concepts [LO17-9, 17-10]

Century-Fox Corporation's employees are eligible for postretirement health care benefits after both being employed at the end of the year in which age 60 is attained and having worked 20 years. Jason Snyder was hired at the end of 2001 by Century-Fox at age 34 and is expected to retire at the end of 2029 (age 62). His retirement is expected to span five years (unrealistically short in order to simplify calculations). The company's actuary has estimated the net cost of retiree benefits in each retirement year as shown below. The discount rate is 8%. The plan is not prefunded. Assume costs are incurred at the end of each year.

Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)

Year	Expected Age	Net Cost
2030	63	$ 6,000
2031	64	6,400
2032	65	4,300
2033	66	4,500
2034	67	4,800

Required:

1. Calculate the present value of the net benefits as of the expected retirement date.
2. With respect to Snyder, what is the company's expected postretirement benefit obligation at the end of 2024?
3. With respect to Snyder, what is the company's accumulated postretirement benefit obligation at the end of 2024?
4. With respect to Snyder, what is the company's accumulated postretirement benefit obligation at the end of 2025?
5. What is the service cost to be included in 2025 postretirement benefit expense?
6. What is the interest cost to be included in 2025 postretirement benefit expense?
7. Show how the APBO changed during 2025 by reconciling the beginning and ending balances.

2. Calculate the present value of the net benefits as of the expected retirement date. 3. With respect to Snyder, what is the company's expected postretirement benefit obligation at the end of 2024 ? 4. With respect to Snyder, what is the company's accumulated postretirement benefit obligation at the end of 2024 ? 5. With respect to Snyder, what is the company's accumulated postretirement benefit obligation at the end of 2025 ? 6. What is the service cost to be included in 2025 postretirement benefit expense? 7. What is the interest cost to be included in 2025 postretirement benefit expense? Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar. Show how the APBO changed during 2025 by reconciling the beginning and ending balances. Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar