Question: Data pertaining to the postretirement health care benefit plan of Sterling Properties include the following for 2011:
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($ in 000s)
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Service cost
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$124
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Accumulated postretirement benefit obligation, January 1
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700
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Plan assets (fair market value), January 1
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50
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Prior service cost-AOCI
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none
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Net gain-AOCI (2011 amortization, $1)
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91
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Retiree benefits paid (end of year)
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87
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Contribution to health care benefit fund (end of year)
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185
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Discount rate
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7%
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Return on plan assets (actual and expected)
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10%
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Required:
(1) Determine the postretirement benefit expense for 2011.
(2) Prepare the appropriate journal entries to record the postretirement benefit expense, funding, and retiree benefits for 2011.