Intermediate Accounting: P20-13 Dusty Hass Foods Inc. sponsors a postretirement medical

Intermediate Accounting
*P20-13 Postretirement Benefit Worksheet
Dusty Hass Foods Inc. sponsors a postretirement medical and dental benefit plan for its employees. The company adopts the provisions of Statement No. 106 beginning January 1, 2011. The following balances relate to this plan on January 1, 2011.
Plan assets 200,000
Expected postretirement benefit obligation 820,000
Accumulated postretirement benefit obligation 200,000
No prior service costs exist.
As a result of the plan’s operation during 2011, the following additional data are provided by the actuary.
Service cost for 2011 70,000
Discount rate 10%
Contributions to plan in 2011 65,000
Expected return on plan assets 10,000
Actual return on plan assets 15,000
Benefits paid to employees 44,000
Average remaining service to full eligibility 20 years

Instructions
(a) Using the preceding data, compute the net periodic postretirement benefit cost for 2011 by preparing a worksheet that shows the journal entry for postretirement expense and the year-end balances in the related postretirement benefit memo accounts. (Assume that contributions and benefits are paid at the end of the year.)
(b) Prepare any journal entries related to the postretirement plan for 2011 and indicate the postretirement amounts reported in the financial statements for 2011.
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