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What the defined benefit liability at the end of second year

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Reference no: EM132921445

Problem - Use the following information for the next two (2) questions: A lump sum benefit is payable on termination of services and equal to one percent of final salary for each year of service. The salary in year 1 is P10,000 and is assumed to increase at 7% each year. The discount rate used is 10%. The entity does not fund its obligation to pay lump-sum benefits. The employee is expected to leave at the end of year 5.

1) What the defined benefit liability at the end of the second year?

2) What the amount to be recognized as expense in the second year?

Reference no: EM132921445

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