Compute the OPRB expense

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Question - On January 1, 2015, Clash and Dash Company adopted a healthcare plan for its retired employees. To determine eligibility for benefits, the company retroactively gives credit to the date of hire for each employee. The following information is available about the plan:

Service cost $31,550

Accumulated postretirement benefit obligation (1/1/15) 114,000

Expected return on plan assets 0

Amortization of Prior service cost 11,400

Payments to retired employees during 2016 5,530

Interest rate 10%

Average remaining service period of active plan participants (1/1/15) 10 years

Required - How to Compute the OPRB expense for 2015 if the company uses the average remaining service life to amortize the prior service cost and how to make the journal entries for 2015 if the plan is not funded.

Reference no: EM132653950

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