*Ex. 20-127—Computing and recording postretirement expense.

The following information is related to the Hight Co. postretirement benefits plan for 2008:

 

Service cost

$168,000

 

Discount rate

10%

 

EPBO, January 1, 2008

820,000

 

APBO, January 1, 2008

640,000

 

Unrecognized transition amount amortization

32,800

 

Actual return on plan assets in 2008

22,400

 

Expected return on plan assets in 2008

29,000

 

Contributions (funding)

224,000

 

Instructions

(a)Compute the amount of postretirement expense for 2008. (Show computations.)

(b)Prepare the journal entry to record postretirement expense and Hight's contributions for 2008.

Ex. 20-128—Computing postretirement expense and APBO.

The following information is related to the postretirement benefits plan of Gordon, Inc. for 2008:

 

Service cost

$   280,000

 

Discount rate

8%

 

APBO, January 1, 2008

2,100,000

 

EPBO, January 1, 2008

2,400,000

 

Actual return on plan assets in 2008

104,000

 

Expected return on plan assets in 2008

95,600

 

Amortization of unrecognized transition amount

107,200

 

Amortization of unrecognized net gain

7,200

 

Contributions (funding)

400,000

 

Benefit payments

208,000

 

Instructions

(a) Compute the amount of postretirement expense for 2008. (Show computations.) (b)               Compute the amount of the APBO at December 31, 2008.

 

 

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