The accrued obligation at the beginning of the year was $289,000 and the current service cost for the year is $92,000.Assuming an interest factor of 8%,what is the accrued obligation at the end of the year?
A) $404,120
B) $381,000
C) $403,860
D) $363,660

Question

Quizplus · Accepted Answer

The correct answer is A. The accrued obligation at the end of the year is $404,120. This is calculated as follows:Accrued obligation at the beginning of the year: $289,000Current service cost for the year: $92,000Interest on accrued obligation: $289,000 x 8% = $23,120Accrued obligation at the end of the year: $289,000 + $92,000 + $23,120 = $404,120

The Accrued Obligation at the Beginning of the Year Was