Australasia Ltd started operating on 1 July 2021 with 12 employees. Three years later all of those employees were still with the company. On 1 July 2023 the company hired 15 more people but by 30 June 2024 only 10 of those employed at the beginning of that year were still employed by Australasia Ltd.

• All employees are entitled to 13 weeks’ long-service leave after a conditional period of 10 years of employment with Australasia Ltd.
• At 30 June 2024 Australasia Ltd estimates the following: 
• The aggregate annual salaries of all employees hired on 1 July 2021 is now $600 000
• The aggregate annual salaries of all current employees hired on 1 July 2023 is now $400 000
• The probability that employees hired on 1 July 2021 will continue to be employed for the duration of the conditional period is 40 percent
• The probability that employees hired on 1 July 2023 will continue to be employed for the duration of the conditional period is 20 percent.
• 
  

Salaries are expected to increase indefinitely at 1 percent per annum.

The interest rates on high-quality corporate bonds are as follows:

At 30 June 2023 the provision for long-service leave was $6000.

REQUIRED

a. Calculate the total accumulated long-service leave benefit as at 30 June 2024.

b. What amount should be reported for the long-service leave provision as at 30 June 2024 in accordance with AASB 119?

c. Prepare the journal entry for the provision for long-service leave for 30 June 2024 in accordance with AASB 119.

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1 July 2023 30 June 2024 6% 8% 8% 10% Corporate bonds maturing in seven years 4% Corporate bonds maturing in eight years 5% Corporate bonds maturing in nine years 5% Corporate bonds maturing in ten years 6%