Century-Fox Corporation's employees are eligible for postretirement health care benefits after both being employed at the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Century-Fox Corporation's employees are eligible for postretirement health care benefits after both being employed at the end of the year in which age 60 is attained and having worked 20 years. Jason Snyder was hired at the end of 2001 by Century-Fox at age 34 and is expected to retire at the end of 2029 (age 62). His retirement is expected to span five years (unrealistically short in order to simplify calculations). The company's actuary has estimated the net cost of retiree benefits in each retirement year as shown below. The discount rate is 8%. The plan is not prefunded. Assume costs are incurred at the end of each year. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Year Expected Age 2030 63 Net Cost $ 4,400 2031 2032 2033 2034 4266 64 4,800 65 2,700 2,900 67 3,200 Required: 2. Calculate the present value of the net benefits as of the expected retirement date. 3. With respect to Snyder, what is the company's expected postretirement benefit obligation at the end of 2024? 4. With respect to Snyder, what is the company's accumulated postretirement benefit obligation at the end of 2024? 5. With respect to Snyder, what is the company's accumulated postretirement benefit obligation at the end of 2025? 6. What is the service cost to be included in 2025 postretirement benefit expense? 7. What is the interest cost to be included in 2025 postretirement benefit expense? 8. Show how the APBO changed during 2025 by reconciling the beginning and ending balances. Complete this question by entering your answers in the tabs below. Req 2 to 7 Req 8 2. Calculate the present value of the net benefits as of the expected retirement date. 3. With respect to Snyder, what is the company's expected postretirement benefit obligation at the end of 2024? 4. With respect to Snyder, what is the company's accumulated postretirement benefit obligation at the end of 2024? 5. With respect to Snyder, what is the company's accumulated postretirement benefit obligation at the end of 2025? Century-Fox Corporation's employees are eligible for postretirement health care benefits after both being employed at the end of the year in which age 60 is attained and having worked 20 years. Jason Snyder was hired at the end of 2001 by Century-Fox at age 34 and is expected to retire at the end of 2029 (age 62). His retirement is expected to span five years (unrealistically short in order to simplify calculations). The company's actuary has estimated the net cost of retiree benefits in each retirement year as shown below. The discount rate is 8%. The plan is not prefunded. Assume costs are incurred at the end of each year. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Year Expected Age 2030 63 Net Cost $ 4,400 2031 2032 2033 2034 4266 64 4,800 65 2,700 2,900 67 3,200 Required: 2. Calculate the present value of the net benefits as of the expected retirement date. 3. With respect to Snyder, what is the company's expected postretirement benefit obligation at the end of 2024? 4. With respect to Snyder, what is the company's accumulated postretirement benefit obligation at the end of 2024? 5. With respect to Snyder, what is the company's accumulated postretirement benefit obligation at the end of 2025? 6. What is the service cost to be included in 2025 postretirement benefit expense? 7. What is the interest cost to be included in 2025 postretirement benefit expense? 8. Show how the APBO changed during 2025 by reconciling the beginning and ending balances. Complete this question by entering your answers in the tabs below. Req 2 to 7 Req 8 2. Calculate the present value of the net benefits as of the expected retirement date. 3. With respect to Snyder, what is the company's expected postretirement benefit obligation at the end of 2024? 4. With respect to Snyder, what is the company's accumulated postretirement benefit obligation at the end of 2024? 5. With respect to Snyder, what is the company's accumulated postretirement benefit obligation at the end of 2025?
Expert Answer:
Answer rating: 100% (QA)
To calculate the present value of the net benefits as of the expected retirement date we need to discount the future net costs using the discount rate of 8 Here are the calculations Year Net Cost Expe... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Posted Date:
Students also viewed these accounting questions
-
Century-Fox Corporations employees are eligible for postretirement health care benefits after both being employed at the end of the year in which age 60 is attained and having worked 20 years. Jason...
-
Century-Fox Corporations employees are eligible for postretirement health care benefits after both being employed at the end of the year in which age 60 is attained and having worked 20 years. Jason...
-
If you wanted to double $1,000 in 10 years' time, what average rate of return would you require on your investment?
-
a. Explain the effect of the increase in the rent ceiling on the quantity of rent-stabilized apartments. b. Why is rent stabilization a source of conflict between renters and owners of apartments?...
-
The values of the chi-square variable cannot be a. Positive b. 0 c. Negative d. None of the above
-
Complete the solution of Equation 7.97 for the initial conditions \(y(x, 0)=d(x)\) and \(\dot{y}(x, 0)=v(x)\). yr(x,t) =BY,(x) Fr(t) =Y,(x) cos(wyt - or), (7.97)
-
William Evans began Evans Distributors, a sporting goods distribution company, in January 2016, and engaged in the transactions below. Assume Evans Distributors and its customers take advantage of...
-
You have been given the responsibility for ensuring that your team is up to date with all legislation that affects their day to day practice as a real estate agent. Develop a list of tasks to achieve...
-
Tetrahedral dice are described in exercise 18.14. give a probability model for rolling two such dice. that is, write down all possible outcomes and give a probability to each. What is the probability...
-
Cheung Keong Ltd. currently has \($2,150,000\) in current assets and \($860,000\) in current liabilities. The companys managers want to increase the firms inventory, which will be financed by a...
-
Macinski Inc., in its first year of operations, has the following differences between the book basis and tax basis of its assets and liabilities at the end of 2015. It is estimated that the warranty...
-
In order to be able to use industry benchmarks to evaluate a firms performance, it is necessary to determine the industry to which the firm belongs. Eurostat (European Statistical Office) is a...
-
Imagine that you are an independent musician that plays the drums. You are on tour with a band, but it is your responsibility to get from place to place with your gear. For short trips, you need a...
-
At present, 20-year U.K. government gilts are yielding 5.4 percent, while some 20-year U.K. corporate bonds that you are interested in are yielding 9.6 percent. Assuming that the maturity-risk...
-
Write a paper about the following: discuss whether there is a breach of contract in the following scenario: Contract provision: Employee agrees that at no time during the term of this agreement, or...
-
What mass of H2 will be produced when 122 g of Zn are reacted? Zn(s) + 2HCl(aq) ( ZnCl2(aq) + H2(g)
-
If the force P causes point A to be displaced vertically by 2.2 mm, determine the normal strain developed in each wire. 600 mm B 30 P 600 mm 30 C
-
The square plate is deformed into the shape shown by the dashed lines. If DC has a normal strain x = 0.004, DA has a normal strain y = 0.005 and at D, Y xy = 0.02 rad, determine the average normal...
-
The rubber block is fixed along edge AB, and edge CD is moved so that the vertical displacement of any point in the block is given by v(x) = (vo/b 3 )x 3 . Determine the shear strain Y xy = 0.02 at...
Study smarter with the SolutionInn App