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Stockton Labeling Company has a retiree health care plan. Employees become fully eligible for benefits after working for the company eight years. Stockton hired Misty
Stockton 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 $26,000. 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. (Due to rounding 2020 EPBO may not equal to total total expense. Do not round intermediate calculations. Round your final answers to the nearest whole dollar.) Fraction Earned Interest cost 10% EPBO APBO Service cost Expense 2021 2022 2023 2024 2025 2026 2027 2028 Totals $ 0 $ 0 $ Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.5% x service years * final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2007 and is expected to retire at the end of 2041 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $93,000 at the end of 2021 and the company's actuary projects her salary to be $295,000 at retirement. The actuary's discount rate is 7%. At the beginning of 2022, changing economic conditions caused the actuary to reassess the applicable discount rate. It was decided that 8% is the appropriate rate. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Calculate the effect of the change in the assumed discount rate on the PBO at the beginning of 2022 with respect to Davenport. (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) The gain on PBO is
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