Question

1. a) Differentiate vesting sick leave and non-vesting sick leave.

b) Provide two examples of long-term employee benefits
2. Dainty Ltd has an average weekly payroll of $200 000. The employees are entitled to 2 weeks',
non-vesting sick leave per annum. Past experience suggests that 56% of employees will take the
full 2 weeks' sick leave and 22% will take 1 week's leave each year. The rest of the employees
take no sick leave.
a) Calculate the expected annual sick-leave expense for Dainty Ltd (on the basis of average
salaries).
b) Provide the journal entry necessary to recognise the sick-leave entitlement expense as it
accrues each week.
c) In the current week an employee with a weekly salary of $600 has been off sick for the first
time this year. The employee took 2 days off out of her normal 5-day working week. Assuming
that PAYG tax is deducted at 30%, what would the entry be to record the employee's weekly
salary (round amounts to the nearest dollar)?

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