Sonic Ltd provides 4 weeks (20 days) of accumulating vested annual leave for each year of service. The company policy is that annual leave must be taken within 6 months of the end of the period in which it accrues. Annual leave is paid at the base salary rate (which excludes commissions, bonuses and overtime). A 17.5% loading is applied to annual leave payments. The following summary data is derived from Sonic Ltd.’s payroll records for the year ended 30 June 2020. The amounts shown are applicable at 30 June 2020. Employee category Base pay/day $ Annual leave Balance 1 July 2019 (days) Accumulated during year (days) Taken during year (days) Executives 500 260 220 260 Consultants 350 300 540 600 Managers 400 230 330 360 Admin staff 250 240 230 250 Additional information After leave taken during the year had been recorded, Sonic Ltd.’s trial balance revealed that the provision for annual leave had a credit balance of $64,125 at 30 June 2020. Required Calculate the annual leave expense at 30 June 2020 by completing the following table. Prepare journal the entry to account for the annual leave expense at 30 June 2020.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

22nd Edition

ISBN:9781305666160

Author:James A. Heintz, Robert W. Parry

Publisher:James A. Heintz, Robert W. Parry

Chapter8: Payroll Accounting: Employee Earnings And Deductions

Section: Chapter Questions

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Sonic Ltd provides 4 weeks (20 days) of accumulating vested annual leave for each year of service. The company policy is that annual leave must be taken within 6 months of the end of the period in which it accrues. Annual leave is paid at the base salary rate (which excludes commissions, bonuses and overtime). A 17.5% loading is applied to annual leave payments.

The following summary data is derived from Sonic Ltd.’s payroll records for the year ended 30 June 2020. The amounts shown are applicable at 30 June 2020.

Employee category	Base pay/day $	Annual leave
Balance 1 July 2019 (days)	Accumulated during year (days)	Taken during year (days)
Executives	500	260	220	260
Consultants	350	300	540	600
Managers	400	230	330	360
Admin staff	250	240	230	250

Additional information

After leave taken during the year had been recorded, Sonic Ltd.’s trial balance revealed that the provision for annual leave had a credit balance of $64,125 at 30 June 2020.

Required

Calculate the annual leave expense at 30 June 2020 by completing the following table.
Prepare journal the entry to account for the annual leave expense at 30 June 2020.

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