Question & Answer: Pirate Ltd employs 5 staff. Each staff member is entitled to 20 days annual leave per annum Leave loading of 17.5% is paid when the leave is taken. At 1 Ju…..

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DenejtiS, Stuch ds wages and salaries, sick leave ana annal tev 7) Pirate Ltd employs 5 staff. Each staff member is entitled to 20 days annual leave per annum. Leave loading of 17.5% is paid when the leave is taken. At 1 July 2013 the balance in the provision for annual leave account was $20 303. Details of each employees leave entitlement at 30 June 2014 are as follows: ESaluaya araceca Employee Days owingDays taken 17 24 during year Jo Bird Bill Brown Ben Fit Greg Horn $62 500 Lou Hamilton $90 0009 $65 000 $70 000 $85 000 12 18 15 26 There are 260 work days in a year. On 1 July each year all employees receive a 5%wage rise. There are no other wage rises given during the year. The closing balance in the provision for annual leave account at 30 June 2014 is: a) $18 712. b) $19 647 c) $23 086. d) $27 221. Answer: c Learning Objective 2: Prepare journal entries to account for short-term liabilities for employee benefits, such as wages and salaries, sick leave and annual leave

Pirate Ltd employs 5 staff. Each staff member is entitled to 20 days annual leave per annum Leave loading of 17.5% is paid when the leave is taken. At 1 July 2Q13 the balance in t e provision for annual leave account was $20 303. Details of each employee’s leave entitlement at 30 June 2014 are as follows: There are 260 work days in a year. On 1 July each year all employees receive a 5% wage rise. There are no other wage rises given during the year. The closing balance in the provision for annual leave account at 30 June 2014 is: a) $18 712. b) $19 647. *c) $23 086. d) $27 221.

Expert Answer

 

Salary Days owing 1/7/13 Leave entitle for the year Total leaves available T Days taken during year D Leave for which provision should be made L=T-D salary after 5% hike S Provision S/260*L
Jo Bird $65,000 17 20 37 22 15 $68,250 $3,937.50
Bill brown 70000 5 20 25 12 13 $73,500 $3,675.00
ben Fit 85000 24 20 44 18 26 $89,250 $8,925.00
Greg Horn 62500 3 20 23 15 8 $65,625 $2,019.23
Lou Hamilton 90000 9 20 29 26 3 $94,500 $1,090.38
Total $19,647.12
Add: 17.5% leave loading $3,438.25
(19647.12*17.5%)
Provision $23,085.36
ans Provision at 30 June 2014 c) $23086
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