Brown Industries provides postretirement health care benefits to employees. On January 1 of the current calendar year, the following data were available. Management amortizes prior service cost on a straight-line basis. The interest rate is 10%. Service cost for the current year is $95,000.
Required:
1) Calculate the prior service cost amortization for the current year.
2) Calculate the postretirement benefit expense for the current year.
3) Prepare the entry to record the postretirement benefit expense for the current year.

Question

Brown Industries provides postretirement health care benefits to employees. On January 1 of the current calendar year, the following data were available.  Management amortizes prior service cost on a straight-line basis. The interest rate is 10%. Service cost for the current year is $95,000.
Required:
1) Calculate the prior service cost amortization for the current year.
2) Calculate the postretirement benefit expense for the current year.
3) Prepare the entry to record the postretirement benefit expense for the current year.

Quizplus · Accepted Answer

The Answer of Brown Industries provides postretirement health care benefits to employees. On January 1 of the current calendar year, the following data were available.  Management amortizes prior service cost on a straight-line basis. The interest rate is 10%. Service cost for the current year is $95,000.
Required:
1) Calculate the prior service cost amortization for the current year.
2) Calculate the postretirement benefit expense for the current year.
3) Prepare the entry to record the postretirement benefit expense for the current year.

Brown Industries Provides Postretirement Health Care Benefits to Employees