Opsco
Corp. provides the following information about its non-pension, post-retirement
benefit plan for the year 2011:
Service
cost ……………………………………………… $ 202,500
Past
service cost amortization …………………………… 6,750
Contribution
to the plan ………………………………….. 47,250
Actual
and expected return on plan assets ………………. 141,750
Benefits
paid ……………………………………………. 90,000
Plan
assets at Jan. 1, 2011 ………………………………. 1,597,500
Post-retirement
benefit obligation at Jan. 1, 2011 ………. 1,822,500
Unrecognized
past service cost balance at Jan. 1, 2011 ….. 45,000
Amortization
of net transition liability ……………………. 20,250
Unrecognized
net transition liability at Jan. 1, 2011………. 180,000
Discount
rate ……………………………………………………….9%
Instructions
Calculate
the post-retirement benefit expense for 2011, and prepare all required journal
entries related to the postretirement benefit plan that were made by Opsco in
2011.
Service
cost $ 202,500
Interest
on accrued post-retirement benefit
obligation (9% X $1,822,500) 164,025
Expected
return on plan assets (141,750)
Amortization
of unrecognized past service cost 6,750
Amortization
of unrecognized transition amount 20,250
Post-retirement
benefit expense $251,775
Retirement
Benefit Expense........... 251,775
Accrued Retirement Benefit
Asset/Liability............... 251,775
Accrued
Retirement Benefit
Asset/Liability.................. 47,250
Cash.......................... 47,250
