Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. required: what is the current service cost? note

REQUIRED: What is the current service cost? Note 1: Current service cost Original Corp....

80.2K

Verified Solution

Question

Accounting

image

REQUIRED:

What is the current service cost?

Note 1: Current service cost Original Corp. encourages its employees older than 60 years to extend their employment with the entity by promising a lump sum benefit equal to 3% of final salary for each year of service they remain employed by the entity after their 60th birthday provided they remain employed until they are 65, at which time, in accordance with local laws, employees are required to retire. The benefit is payable to the employees on retirement. There are currently twenty (20) employees entitled for the benefit whose 60th birthday is on January 1, 2020. Their salary rates for the year ended December 31, 2020 is P1,200,000 each. In 2020 and 2021, the entity made the following assumptions: Employees salary rate should increase by 7.5% compounded each year. The rate of return on high quality corporate bond is 10%. The employee salary rate for 2021 is P1,290,000

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students