Question: Dusty Hass Foods Inc sponsors a postretirement medical and dent

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

(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.

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  • CreatedJune 17, 2013
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