Ala joined the company 7 years ago. She is entitled to 13 weeks of long service
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Question:
Ala joined the company 7 years ago.
She is entitled to 13 weeks of long service leave after completing 10 years of service with the company.
Her current salary is $50,000. Salaries are expected to grow by 2% for the next 5 years.
Sala is 80% certain that she will not leave the company in the next 5 years.
High quality bonds with a 5 year term have an interest rate of 6% and high quality bonds with a 3 year term have an interest rate of 4%
Required:
a) Calculate the company’s long service leave liability relating to Sala.
b) Prepare all journal entries relating to long service leave, assuming there is already a balance of $4,000 in the account.
Use an excel sheet to post your answer.
Expert Answer:
Solution a Measurement of Long Service Leave liability Long service Leave liability is measured at the present Value of estimated Future Cash flows to ... View the full answer
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