Liability for postretirement drug benefits

Assignment Help Accounting Basics
Reference no: EM13146274

The chapter talks about Delphi Company reducing its other postretirement benefits by approximately $500 million because of a change in the law. The federal government will reimburse companies for prescription drug benefits that they provide to their employees who are of Medicare age. The reimbursement is 28% of all prescription drug benefits in excess of $250 per person per year, up to a maximum of $1,300 per person.

Required

A. Identify the process the company would use to identify the liability for postretirement drug benefits. Assume this was done prior to the new federal law. Identify how the auditor might audit the data.

B. Explain how the auditor would verify the $500 million reduction in liability due to the new federal law.

Reference no: EM13146274

Questions Cloud

What are three categories of genes : What are three categories of genes that when mutated can lead to tumor formation? Describe the characteristics of each category.
Calculate the oh- of each aqueous solution : Calculate the OH- of each aqueous solution with the following H3O+ A baking soda 1.1 X 10-8 M B orange juice 2.1 X 10-4
Describe what is meant by a genetic switch : describe what is meant by a "genetic switch". give a known example or design one yourself.
What rate will potential output grow : 25% is capital's share of income and labor's share of income is 75%, the stocks of both capital and labor increase by 50% and there is no technology growth, at what rate will potential output grow? Will the capital labor ratio increase at all?
Liability for postretirement drug benefits : Identify the process the company would use to identify the liability for postretirement drug benefits. Assume this was done prior to the new federal law. Identify how the auditor might audit the data.
Harasser are manager, coworker, or third parties : In what ways so the standards used to attribute liability for harassment to employers differ depending on on whether the harasser are manager, coworker, or third parties?
What is the mass in pounds of amount of whole blood : whole blood what is the mass in pounds of this amount of whole blood
Statement referring to fixed costs : Which of the following statements is true when referring to fixed costs?
Explain trade-offs that will occur when lower the sample : Card holders should be sampled to meet the original requirements of the sample. Then explain the trade-offs that will occur when you lower the sample to $10,000 to meet their budget.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Prepare an income statement-absorption costing

Marketing and adminstrative expenses were fixed and totaled 20,000 each year a. Prepare an income statement for each year using absorption costing.

  Analyzing and close a commerical loan

Management estimates that it costs $500 to analyze and close a commerical loan. This amount has been included in the $250,000 of inderict costs. How much of the $250,000 indirect costs should be allocated to the Consumer Department?

  Journal entries to record the issuance

Make journal entries to record the issuance of 100,000 shares of common stock at $20 per share for each of the following independent cases

  Fasb codification-inventory research

What is the formal definition in the glossary of the term "Inventory?" What is the Codification topic number for inventory? What types of entities are not covered by the guidance in the Inventory Topic? (Provide the Codification reference for your ..

  Accounting for pensions basics

In the United States, accounting for pensions has received a great deal of attention. In other countries, pension accounting is given much less attention. In one page, examine the reasons that would explain why pension accounting is given much les..

  Annuity payment-includible in a gross income

How would I calculate an annuity contract that pays $800 per month. The annuity cost $60,000 and it has an expected return of $100,000. How much of each monthly annuity payment is includible in a gross income?

  Sin tax on cigarettes and alcohol

Please help with writing a research paper that examines an issue of current relevance to public policymaking.

  Inventory account problem

Paul and Ray agree that some of the inventory is obsolete. The inventory account is decreased before Janet is admitted. Janet invests $190,000 for a one-fourth interest.

  Identification method of costing inventory

Ted's Used Cars uses the specific identification method of costing inventory. During March, Ted purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each.

  What consolidation worksheet entry would be made

when a company applies the partial equity method in accounting for its investment in a subsidiary and initial value, book values, and fair values of net assets acquired are all equal, what consolidation worksheet entry would be made?

  What is their year 1 gross income

Kabuo and Melinda got married on December 15, year 1. Kabuo's salary for the year was $54,000, and Melinda's was $62,000. In addition, Kabuo received $250 of interest income, ($100 of which was from municipal bonds), and Melinda received $10,000 o..

  Date of the financial statements

At the date of the financial statements, common stock shares issued would exceed common stock shares outstanding as a result of the

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd