Hollenbeck Foods Inc. sponsors a post-retirement medical and dental benefit plan for its employees. The following balances relate to this plan on January 1, 2020.

Plan assets.......................................................................................$200,000
Expected post-retirement benefit obligation................................820,000
Accumulated post-retirement benefit obligation.........................200,000

No prior service costs or OCI balances exist.

As a result of the plan’s operation during 2020, the following additional data are provided by the actuary.

Service cost is $70,000

Discount rate is 10%

Contributions to plan are $65,000

Expected return on plan assets is $10,000

Actual return on plan assets is $15,000

Benefits paid to employees are $44,000

Average remaining service to full eligibility: 20 years

Instructions

a. Using the preceding data, compute the net periodic post-retirement benefit cost for 2020 by preparing a worksheet that shows the journal entry for post-retirement expense and the year-end balances in the related post-retirement benefit memo accounts. (Assume that contributions and benefits are paid at the end of the year.)

b. Prepare any journal entries related to the post-retirement plan for 2020 and indicate the post-retirement amounts reported in the financial statements for 2020.