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.

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.

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.