Question

P17-20 Shown below is the retiree health care plan for Waleska Industries 2018 Beginning Balances 460 2018 Ending Balances 485 ($ in thousands) Accumulated post retirement BO Plan assets Funded status 75 (460) (410) 110 Prior service cost - AOCI Net gain - AOIC 120 (50) (49) Waleska began funding the plan in 2018 with a contribution of $127,000 to the benefit fund at the end of the year. Retirees were paid $52,000. The actuaries discount rate is 5%, There were no changes in estimates and assumptions. ($ in 000's) Determine the following: 1. Service cost: APBO: Beginning of 2018 End of 2018 Service cost....... 2. Post retirement benefit expense: Amortization of: Post retirement benefit expense 3. Net benefit liability: Net PRBO

Answer 1

($ in 000's) 460.00 1. Service cost APBO: Beginning of 2018 Service cost Interest cost $460 X 5%) Loss (Gain) on APBO Less: Retiree benefits End of 2018 23.00 0.00 (52.00) 485.00 Service cost = $485 - 460 - 23+52 = $54 ($ in 000's) 54.00 23.00 0.00 2.Post retirement benefit expense: Service cost | Interest cost $460 X 5%) Return on plan assets Amortization of: Prior service cost ($120 - 110 Net gain ($50 - 49 Post retirement benefit expense 10.00 (1.00 86.00 3. Net benefit liability: ($ in 000's) Accumulated post retirement benefit obligation | 485.00 Less: Plan assets (75.00) Net PRBO* 410.00 *Net Post Retirement Benefit Liability