Dusty Hass Foods Inc. sponsors a postretirement medical and dental benefit plan for its employees. The following balances relate to this plan on January 1, 2010.

Plan assets...........................................€200,000

Defined benefit obligation ...................200,000

No past service, costs exist.

As a result of the plan’s operation during 2010, the following additional data are provided by the actuary.

Service cost for 2010 is €70,000

Discount rate is 9%

Contributions to plan in 2010 are €60,000

Expected return on plan assets is €9,000

Actual return on plan assets is €15,000

Benefits paid to employees from plan are €44,000

Average remaining service lives of employees: 20 years

Instructions

(a) Using the preceding data, compute the net periodic postretirement benefit cost for 2010 by preparing a worksheet that shows the journal entry for postretirement expense and the year-end balances in the related postretirement benefit memo accounts. (Assume that contributions and benefits are paid at the end of the year.)

(b) At December 31, 2010, prepare a schedule reconciling the funded status of the plan with the post-retirement amount reported on the statement of financial position.

(c) Hass elects corridor amortization for actuarial gains and losses. Will any amortization be recorded in 2010? 2011? Explain.