Question

Indigo Co. provides the following information about its postretirement benefit plan for the year 2017.

Service cost $83,900
Prior service cost amortization 3,100
Contribution to the plan 51,000
Actual and expected return on plan assets 67,100
Benefits paid 42,700
Plan assets at January 1, 2017 697,300
Accumulated postretirement benefit obligation at January 1, 2017 756,400
Accumulated OCI (PSC) at January 1, 2017 103,300 Dr.
Discount rate 8 %
Compute the postretirement benefit expense for 2017.
Postretirement benefit expense $

Answer 1

$80,412

Step-by-step explanation:

The calculation of post retirement benefit expense is shown below:-

Post retirement benefit expense = Service cost + Interest cost - Actual return + Amortization of Prior service cost

= $83,900 + ($756,400 × 8%) - $67,100 + $3,100

= $83,900 + $60,512 - $67,100 + $3,100

= $80,412

Therefore for computing the post retirement benefit expense we simply applied the above formula.