Calculate the OPRB expense of Company F for the year 2019; assume that the company uses the average remaining service life to amortize the prior service cost.

Question

On January 1, 2019, Fun Company adopted a healthcare plan for its retired employees. To determine eligibility for benefits, the company retroactively gives credit to the date of hire for each employee. The following information is available about the plan: Service cost $31,550 Accumulated postretirement benefit obligation (1/1/19) 114,000 Expected return on plan assets 0 Amortization of Prior service cost 11,400 Payments to retired employees during 2019 5,530 Interest rate 10% Average remaining service period of active plan participants (1/1/19) 10 years Required: 1. Compute the OPRB expense for 2019 if the company uses the average remaining service life to amortize the prior service cost. 2. Prepare all the required journal entries for 2019 if the plan is not funded.

Answer 1

Question

Chapter 19, Problem 16E

1.

To determine

Calculate the OPRB expense of Company F for the year 2019; assume that the company uses the average remaining service life to amortize the prior service cost.

2.

To determine

Prepare necessary journal entries of Company F for 2019.

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