Class12 - More problems - PBO/APBO vs. EPBO/APBO Assume the...

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PBO/APBO vs. EPBO/APBO Assume the actuary estimates the net cost of providing health care benefits to a particular employee during her retirement years to have a present value of $10,842 as of the end of 2001. This is the EPBO. If the benefits (and therefore the costs) relate to an estimated 35 years of service and 10 of those years have been completed, the APBO would be: 2001 $10,842 x 10 / 35 = $3,098 EPBO fraction APBO attributed x 1.06 2002 $11,492 x 11 / 35 = $3,612 EPBO fraction APBO attributed HOW THE APBO CHANGED APBO at the beginning of the year $3,098 Interest cost: $3,098 x 6% 186 Service cost: ($11,492 x 1 / 35 ) 328
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APBO at the end of the year $3,612
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Problem 20-2 General Journal Entries Memo Record Annual Pension Expense Cash OCI— Prior Service Cost OCI—Gain/ Loss Pension Asset/Liability Projected Benefit Obligation Plan Assets Balance, Jan. 1, 2011 0 200,000 Cr. 200,000 Dr. Service cost
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This note was uploaded on 12/04/2009 for the course MGMT 351 taught by Professor Staff during the Spring '08 term at Purdue University-West Lafayette.

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Class12 - More problems - PBO/APBO vs. EPBO/APBO Assume the...

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