The accrued obligation at the beginning of the year was $456,000 and the current service cost for the year is $67,000.Assuming an interest factor of 6%,what is the accrued obligation at the end of the year?
A) $523,000
B) $389,000
C) $550,360
D) $554,380

Question

Quizplus · Accepted Answer

Accrued obligation at the end of the year can be calculated using the formula:

Accrued Obligation at the end of the year = Accrued Obligation at the beginning of the year + Current Service Cost + Interest Cost

Interest Cost = Accrued Obligation at the beginning of the year x Interest factor

= $456,000 x 6% = $27,360

Therefore, Accrued Obligation at the end of the year = $456,000 + $67,000 + $27,360 = $550,360

Hence, the correct option is C.

The Accrued Obligation at the Beginning of the Year Was