Richmond Ltd has a profit-sharing arrangement in which 1% of profit for the period is payable to employees, paid 3 months after the end of the reporting period. Employees’ entitlements under the profit-sharing arrangement are subject to their continued employment at the time the payment is made. Based on past staff turnover levels, it is expected that 95% of the share of profit will be paid. Richmond Ltd’s profit for the period was \($700\) million.

Required

Prepare a journal entry to record Richmond Ltd’s liability for employee benefits arising from the profit-sharing arrangement at the end of the reporting period.