Fleetwood Ltd commenced operations on 1 July 2020 and had 420 employees. Average salaries were $70,000 per annum forthe year. Fleetwood Ltd accounts for all recognised employee costs as expenses. Employees are entitled to 13 weeks of longservice leave after 10 years of employment.The following information is based on advice received from actuarial consultants at 30 June 2021.Number of years unit creditNumber of years until long service leave is expected to be paid1 yearРуearsProbability that long service leave will be taken30%Expected increase in salaries (based on inflation)1.5%Yield on 9-year high quality corporate bonds at 30/06/202110%Projected $1 salary over 9 years at 1.5% inflation rate1.1434Present value of $1 lump sum in 9 years at 10%0.4241RequiredDetermine the obligation for long service leave at 30 June 2021, applying the projected unit credit method inaccordance with AASB 119/IAS 19, and prepare the journal entry to account for changes in the provision for longservice leave.

Introduction:- The act of recording or keeping track of any financial or non-financial action is…

Fleetwood Ltd commenced operations on 1 July 2020 and had 420 employees. Average salaries were $70,000 per annum for the year. Fleetwood Ltd accounts for all recognised employee costs as expenses. Employees are entitled to 13 weeks of long service leave after 10 years of employment. The following information is based on advice received from actuarial consultants at 30 June 2021. Number of years unit credit 1 year Number of years until long service leave is expected to be paid Руears Probability that Jong service leave will be taken 30% Expected increase in salaries (based on inflation) 1.5% Yield on 9-year high quality corporate bonds at 30/06/2021 10% Projected $1 salary over 9 years at 1.5% inflation rate 1.1434 Present value of $1 lump sum in 9 years at 10% 0.4241 Required Determine the obligation for long service leave at 30 June 2021, applying the projected unit credit method in accordance with AASB 119/IAS 19, and prepare the journal entry to account for changes in the provision for long service leave.

Fleetwood Ltd commenced operations on 1 July 2020 and had 420 employees. Average salaries were $70,000 per annum for the year. Fleetwood Ltd accounts for all recognised employee costs as expenses. Employees are entitled to 13 weeks of long service leave after 10 years of employment. The following information is based on advice received from actuarial consultants at 30 June 2021. Number of years unit credit 1 year Number of years until long service leave is expected to be paid Руears Probability that Jong service leave will be taken 30% Expected increase in salaries (based on inflation) 1.5% Yield on 9-year high quality corporate bonds at 30/06/2021 10% Projected $1 salary over 9 years at 1.5% inflation rate 1.1434 Present value of $1 lump sum in 9 years at 10% 0.4241 Required Determine the obligation for long service leave at 30 June 2021, applying the projected unit credit method in accordance with AASB 119/IAS 19, and prepare the journal entry to account for changes in the provision for long service leave.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.

Question

Fleetwood Ltd commenced operations on 1 July 2020 and had 420 employees. Average salaries were $70,000 per annum for
the year. Fleetwood Ltd accounts for all recognised employee costs as expenses. Employees are entitled to 13 weeks of long
service leave after 10 years of employment.
The following information is based on advice received from actuarial consultants at 30 June 2021.
Number of years unit credit
Number of years until long service leave is expected to be paid
1 year
Руears
Probability that long service leave will be taken
30%
Expected increase in salaries (based on inflation)
1.5%
Yield on 9-year high quality corporate bonds at 30/06/2021
10%
Projected $1 salary over 9 years at 1.5% inflation rate
1.1434
Present value of $1 lump sum in 9 years at 10%
0.4241
Required
Determine the obligation for long service leave at 30 June 2021, applying the projected unit credit method in
accordance with AASB 119/IAS 19, and prepare the journal entry to account for changes in the provision for long
service leave.

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