ACC 577 help A Guide to career/uophelp.com ACC 577 help A Guide to career/uophelp.com | Page 46

The following information relates to a postretirement benefit plan (in
millions): APBO beginning, $300Plan assets beginning, $100Net
postretirement benefit gain, beginning, $20Amortization of net gain or
loss is based on SL method, 10 year average remaining service
periodPrior service cost, initial amount, recognized four years ago,
$50Amortization of prior service cost is based on SL method, 10 year
average remaining service periodService cost, $40Discount rate,
5%Expected rate of return, 6%Actual return, $10Change in estimated
life expectancy caused a gain of $16, year-endFunding contribution, $20.
What amount of net gain is subject to amortization next year?
Question 9
Information about a postretirement benefit plan at the beginning of the
current year is as follows (in millions). EPBO, $400Discount rate,
5%Average years of service rendered toward full eligibility, 12Average
years of service required to reach full eligibility, 20Plan assets,
$120Expected and actual return, 10%. Compute the reported
postretirement benefit liability at year-end.
Question 10
The balance in the capitalized natural resources deposit account
immediately before beginning removal operations is $110,000. The date
is January 1 of the current (first) year. The firm is then informed that to
comply with environmental regulations, the site will require reclamation
work in four years costing an estimated $30,000 at that time. 5% is the
appropriate risk adjusted rate of return. One-fourth the total estimated
resource in the site was removed in the first year and was sold for
$70,000. Compute the increase in net income for the current year from
operating the site. Ignore income taxes. The present value of $1 four
years hence at 5% is .8227.