The employees of XYZ Ltd are entitled to 10 weeks’ long-service leave (LSL) after 10 years of continuous service with the company. The pre-conditional period is 5 years. The following information has been compiled for calculating the liability for long service leave as at 30 June 2021.
The employees of XYZ Ltd are entitled to 10 weeks’ long-service leave (LSL) after 10 years of continuous service with the company. The pre-conditional period is 5 years. The following information has been compiled for calculating the liability for long service leave as at 30 June 2021.
|
Number of employees as at 30 June 2021 |
Aggregate projected salary when LSL vests |
Aggregate annual salaries for 2020-2021 |
Years of service as at 30 June 2021 |
The expected Government bond rate at the time when LSL vests |
Probability that LSL will vest |
|
22 |
$950,000 |
$560,000 |
4 |
7% |
24% |
|
28 |
$350,000 |
$250,000 |
6 |
4% |
73% |
|
24 |
$190,000 |
$180,000 |
9 |
3% |
100% |
The total long service leave provision reported in the balance sheet as at 30 June 2020 was $59,982.
Assume that no LSL was taken during the year.
Required:
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