Problem 3 and 4
al Metro by T-Mobile 12:34 AM AA a ezto.mheducation.com connect cancel print 4 . Award: 25.00 points The following data are available pertaining to Household Appliance Company's retiree health care plan for 2021: Number of employees covered 3 Years employed as of January 1, 2021 2 [each] Attribution period 25 years Expected postretirement benefit obligation, Jan. 1 $61,000 Expected postretirement benefit obligation, Dec. 31 $64,050 Interest rate 5% Funding none Required: 1. What is the accumulated postretirement benefit obligation at the beginning of 2021? 2. What is interest cost to be included in 2021 postretirement benefit expense? 3. What is service cost to be included in 2021 postretirement benefit expense? 4. Prepare the journal entry to record the postretirement benefit expense for 2021. Complete this question by entering your answers in the tabs below. Req 1 to 3 Req 4 What is the accumulated postretirement benefit obligation at the beginning of 2021? What is interest cost and service cost to be included in 2021 postretirement benefit expense? Show less 1. Accumulated postretirement benefit obligation 2. Interest cost 3. Service cost References General Journal Learning Objective: 17-10 Explain how the obligation for postretirement benefits is measured and how the obligation changes. Difficulty: 2 Medium Learning Objective: 17-11 Determine the somnAnAnte of Aall Metro by T-Mobile 12:33 AM AA a ezto.mheducation.com C connect cancel print 3. Award: 25.00 points Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2021 (the end of Beale's fiscal year), the following pension-related data were available: Projected Benefit Obligation ($ in millions) Balance, January 1, 2021 $ 76 Service cost 78 Interest cost, discount rate, 5% 38 Gain due to changes in actuarial assumptions in 2021 (22) Pension benefits paid (38) Balance, December 31, 2021 $ 816 Plan Assets ($ in millions) Balance, January 1, 2021 $ 790 Actual return on plan assets 48 (Expected return on plan assets, $53) Cash contributions 89 Pension benefits paid (38) Balance, December 31, 2021 $ 889 January 1, 2021, balances: ($ in millions) Pension asset $ 30 Prior service cost-AOCI (amortization $8 per year) 40 Net gain-AOCI (any amortization over 10 years) 139 Required: Prepare a pension spreadsheet to show the relationship among the PBO, plan assets, prior service cost, the net gain, pension expense, and the net pension asset. (Enter credit amounts with a minus sign and debit amounts with a positive sign. Enter your answers in millions.) Prior Net Pension Plan Service Net Pension (Liability) / ($ in millions) PBO Assets Cost-AOCI Gain-AOCI Expense Cash Asset Balance, Jan. 1, 2021 Service cost Interest cost, 5% Expected return on assets Adjust for: Loss on assets Amortization of Prior service cost Net gain Gain on PBO Cash funding Retiree benefits Balance, Dec. 31, 2021 References Worksheet Difficulty: 2 Medium Learning Objective: 17-08 Understand the interrelationships among the elements that constitute a defined benefit pension plan
