Question

Reliance, an automobile manufacturer, reports the following information related to its health care plan for 2013 (amounts in millions of euros). Reliance applies U.S. GAAP.
Health Care Plan Assets, Beginning of 2013. . . . . . . . . . . . . . . . . . . . . . . . . . € 6,497
Plus Actual Return on Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 510
Plus Employer Contribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Less Benefits Paid . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . (1,547)
Health Care Plan Assets, End of 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . € 5,460
Health Care Plan Liability, Beginning of 2013 . . . . . . . . . . . . . . . . . . . . . . €39,274
Plus Service Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 617
Plus Interest Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,004
Less Actuarial Gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,485)
Less Benefits Paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,547)
Health Care Plan Liability, End of 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . €30,863
Service Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . € 617
Interest Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,004
Expected Return on Health Care Plan Investments . . . . . . . . . . . . . . . . . . . . . . (479)
Amortization of Actuarial Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Net Health Care Benefits Expense. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . € 2,183

Give a single journal entry for Reliance to recognize health care benefits expense, the health care plan contribution, and the change in the net health care benefits asset or net health care benefits liability for 2013. Be sure to consider needed entries to Other Comprehensive Income, supporting these entries with amounts from the preceding disclosures. Ignore income taxes.



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  • CreatedMarch 04, 2014
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