Imagine Publishers, Inc. sponsors a postretirement plan providing health care be
ID: 2557895 • Letter: I
Question
Imagine Publishers, Inc. sponsors a postretirement plan providing health care benefits. The following information relates to the current year's activity of Imagine's postretirement benefit plan:
Service Cost $120M
Actual and expected return on plan assets $30M
Interest Cost $40M
Amortization of net loss $10M
Amortization of prior service cost $20M
Retiree benefits paid (end of year) $35M
What is Imagine's postretirement benefit expense?
A) $140 million
B) $150 million
C) $160 million
D) $185 million
Please provide details. Thank you.
Explanation / Answer
Imagine’s Postretirement benefit expense:
Particulars
Dollars in Million
Service Cost
120
Actual and expected return
(30)
Interest cost
40
Amortization of net loss
10
Amortization of prior service cost
20
Postretirement Benefit expense
160
Imagine’s postretirement benefit expense = $160 million
Particulars
Dollars in Million
Service Cost
120
Actual and expected return
(30)
Interest cost
40
Amortization of net loss
10
Amortization of prior service cost
20
Postretirement Benefit expense
160