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Bear Island Ltd has a weekly payroll of $350,000. The employees receive entitlements to 2 weeks' sick leave per year. The sick-leave entitlements are classified

Bear Island Ltd has a weekly payroll of $350,000. The employees receive entitlements to 2 weeks' sick leave per year. The sick-leave entitlements are classified as non-vesting. Past experience, and experience within the industry, suggest that 50 percent of employees will use their full 2 weeks' entitlement each year; 15 percent of employees will take 1 weeks' sick leave each year, and 15 percent of employees will take 1 day's sick leave each year.

(6 marks)

Required:

a) Calculate the expected annual sick leave expense for Bear Island Ltd (on the basis of average salaries).

Calculations (enter calculation formula) Total( enter formula results)
Total annual Sick Leave expense

b) Provide the journal entries necessary each week to recognise the sick-leave entitlement expense as it accrues.

Debit/Credit Description Debit Amount Credit Amount

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