Data pertaining to the postretirement health care benefit plan of Danielson Delivery Service include the following for the current calendar year:
|
Service cost
|
$150,000
|
|
APBO, January 1
|
$800,000
|
|
Plan assets (fair value), January 1
|
$80,000
|
|
Prior service cost (current year amortization, $2,000)
|
$90,000
|
|
Retiree benefits paid (end of year)
|
$90,000
|
|
Net gain (current year amortization, $500)
|
$92,000
|
|
Contribution to health care fund (end of year)
|
$85,000
|
|
Return on plan assets (actual and expected)
|
10%
|
|
Discount rate
|
8%
|
Required:
1) Determine Danielson's postretirement benefit expense for the current year.
2) Prepare the journal entries to record the benefit expense and funding for the current year.