Jamieson Corp.sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence: Jamieson's defined benefit obligation as at December 31^st,Year 1 would be: A) $44,100. B) $44,700. C) $47,100. D) $40,600.

Question

Quizplus · Accepted Answer

The defined benefit obligation is the present value of future benefit payments, discounted using an appropriate interest rate. Using the data provided in the table, the calculation would be:
($600 x 10) + ($500 x 5) / (1.06)^10 + (1.06)^5
= $6,000 + $2,262.56
= $8,262.56
Therefore, the defined benefit obligation as at December 31, Year 1 would be $8,262.56.