Preparing journal entry for health care plan. An automobile manufacturer reports the following information related to its health care plan for 2008 (amounts in millions).
|
Health Care Plan Assets, Beginning of 2008 |
$ 6,497 |
|
Plus Actual Return on Investments |
510 |
|
Plus Employer Contribution |
0 |
|
Less Benefits Paid |
(1,547) |
|
Health Care Plan Assets, End of 2008 |
$ 5,460 |
|
Health Care Plan Liability, Beginning of 2008 |
$39,274 |
|
Plus Service Cost |
617 |
|
Plus Interest Cost |
2,004 |
|
Less Actuarial Gain |
(9,485) |
|
Less Benefits Paid |
(1,547) |
|
Health Care Plan Liability, End of 2008 |
$30,863 |
|
Service Cost |
$ 617 |
|
Interest Cost |
2,004 |
|
Expected Return on Health Care Plan Investments |
(479) |
|
Amortization of Actuarial Losses |
41 |
|
Net Health Care Benefits Expense |
$ 2,183 |
Give a single journal entry for the automobile manufacturer to recognize health care benefits expense, the health care plan contribution, and the change in the net health care benefits asset or net health care benefits liability for 2008. Be sure to consider needed entries in Other Comprehensive Income, supporting the entry in this account with amounts from the preceding disclosures. Ignore income taxes.