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Hart Corporation has an unfunded postretirement health care benefit plan. Life insurance and medical care benefits are provided to employees who render 12 years of service and attain age 55 while in service to the company. At the end of 2013, John Sousa is 35. He was hired by Hart five years ago at age 30 and is expected to retire at the age of 62. The expected postretirement benefit obligation for John is $50,000 at the end of 2013.
Required: Calculate the accumulated postretirement benefit obligation at the end of 2013 and the service cost for 2013 pertaining to John.
How much is the debit to retained earnings if the board votes a 2-for-1 stock split and prepare the necessary journal entries if the board votes a 100% stock dividend.
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