90.2K

Verified Solution

Link Copied!

HELP ASAP entury$-$Fox Corporation's employees are eligible for postretirement health care benefits after both being employed at the end of the year in which age $60$ is attained and having worked $20$ years. Jason Snyder was hired at the end of $2001$ by Century$-$Fox at age $34$ and is expected to retire at the end of $2029($age $62).$ His retirement is expected to span five years $($unrealistically short in order to simplify calculations$).$ The company's actuary has estimated the net cost of retiree benefits in each retirement year as shown below. The discount rate is $7\%.$ The plan is not prefunded. Assume costs are incurred at the end of each year.

Note: Use tables, Excel, or a financial calculator. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ PVA of $$1,$ FVAD of $$1$ and PVAD of $$1)$

Year Expected Age Net Cost

$203063$ $ $4,300$

$2031644,700$

$2032652,600$

$2033662,800$

$2034673,100$

Required:

Calculate the present value of the net benefits as of the expected retirement date.

With respect to Snyder, what is the company's expected postretirement benefit obligation at the end of $2024?$

With respect to Snyder, what is the company's accumulated postretirement benefit obligation at the end of $2024?$

With respect to Snyder, what is the company's accumulated postretirement benefit obligation at the end of $2025?$

What is the service cost to be included in $2025$ postretirement benefit expense?

What is the interest cost to be included in $2025$ postretirement benefit expense?

Show how the APBO changed during $2025$ by reconciling the beginning and ending balances.

Answer & Explanation Solved by verified expert

See Answer