Data pertaining to the postretirement health care benefit plan of Amazing Delivery Service include the following for the current calendar year:
|
Service cost
|
$100,000
|
|
APBO, January 1
|
$600,000
|
|
Plan assets (fair value), January 1
|
$40,000
|
|
Prior service cost
|
None
|
|
Retiree benefits paid (end of year)
|
$75,000
|
|
Net gain (current year amortization, $500)
|
$82,000
|
|
Contribution to health care fund (end of year)
|
$172,000
|
|
Return on plan assets (actual and expected)
|
10%
|
|
Discount rate
|
7%
|
Required:
1) Determine Amazing's postretirement benefit expense for the current year.
2) Prepare the journal entry to record the benefit expense for the current year.