Bazerman Inc. has a postretirement health care benefit plan. On January 1 of the current calendar year, the following plan-related data were available.
The rate of return on plan assets during the year was 12%. The expected return was 10%. The actuary revised assumptions regarding the APBO at the end of the year, resulting in a $42,000 increase in the estimate of the obligation.
Required:
1) Calculate any amortization of net loss that should be included as a component of postretirement benefit expense for the current year.
2) Determine the net loss or gain as of December 31 of the current year.
$$\begin{array} { l r }
\text { Net loss-postretirement benefit plan } & \$ 244,000 \
\text { Accumulated postretirement benefit obligation } & \$ 2,200,000 \
\text { Fair value of plan assets } & \$ 450,000 \
\text { Average remaining service period to retirement } & 12 \text { years } \
\text { Average remaining service period to full eligibility } & 10 \text { years }
\end{array}$$

Question

Bazerman Inc. has a postretirement health care benefit plan. On January 1 of the current calendar year, the following plan-related data were available.
The rate of return on plan assets during the year was 12%. The expected return was 10%. The actuary revised assumptions regarding the APBO at the end of the year, resulting in a $42,000 increase in the estimate of the obligation.
Required:
1) Calculate any amortization of net loss that should be included as a component of postretirement benefit expense for the current year.
2) Determine the net loss or gain as of December 31 of the current year.
 $$\begin{array} { l r } 
\text { Net loss-postretirement benefit plan } & \$ 244,000 \
\text { Accumulated postretirement benefit obligation } & \$ 2,200,000 \
\text { Fair value of plan assets } & \$ 450,000 \
\text { Average remaining service period to retirement } & 12 \text { years } \
\text { Average remaining service period to full eligibility } & 10 \text { years }
\end{array}$$

Quizplus · Accepted Answer

The Answer of Bazerman Inc. has a postretirement health care benefit plan. On January 1 of the current calendar year, the following plan-related data were available.
The rate of return on plan assets during the year was 12%. The expected return was 10%. The actuary revised assumptions regarding the APBO at the end of the year, resulting in a $42,000 increase in the estimate of the obligation.
Required:
1) Calculate any amortization of net loss that should be included as a component of postretirement benefit expense for the current year.
2) Determine the net loss or gain as of December 31 of the current year.
 $$\begin{array} { l r } 
\text { Net loss-postretirement benefit plan } & \$ 244,000 \
\text { Accumulated postretirement benefit obligation } & \$ 2,200,000 \
\text { Fair value of plan assets } & \$ 450,000 \
\text { Average remaining service period to retirement } & 12 \text { years } \
\text { Average remaining service period to full eligibility } & 10 \text { years }
\end{array}$$