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On January 1, 2016, Flash and Dash Company adopted a healthcare plan for its retired employees....

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Accounting

On January 1, 2016, Flash and Dash Company adopted a healthcareplan for its retired employees. To determine eligibility forbenefits, the company retroactively gives credit to the date ofhire for each employee. The following information is availableabout the plan:

Service cost$30,650
Accumulated postretirement benefit obligation (1/1/16)159,600
Expected return on plan assets0
Amortization of Prior service cost11,400
Payments to retired employees during 20164,800
Interest rate8%
Average remaining service period of active plan participants(1/1/16)14 years

Required:

1.Compute the OPRB expense for 2016 if the company uses theaverage remaining service life to amortize the prior servicecost.
2.

Prepare all the required journal entries for 2016 if the plan isnot funded.

Prepare the entries to record:

1.the prior service cost on January 1.
2.the postretirement benefit expense for 2016 on December31.
3.the payments to retired employees during 2016 on December31.
4.the amortization of prior service cost on December 31.

PAGE 1

GENERAL JOURNAL

DATEACCOUNT TITLEPOST. REF.DEBITCREDIT

1

2

3

4

5

6

7

8

Analysis

Compute the OPRB expense for 2016 if the company uses theaverage remaining service life to amortize the prior servicecost.

OPRB expense: _______________

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