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Bluebird Ltd provides credit services. Bluebird Ltd provides its employees with long service leave entitlements of 13 weeks of paid leave for every 10 years
Bluebird Ltd provides credit services. Bluebird Ltd provides its employees with long service leave entitlements of 13 weeks of paid leave for every 10 years of continuous service. As the company has been operating for only 5 years, no employees have become entitled to long service leave. However, the company recognises a provision for long service leave using the projected unit credit approach required by AASB 119/1AS 19. The following information is obtained from Bluebird Ltd's payroll records and actuarial reports for the non- managerial staff of its debt collection business at 30 June 2022. Unit % expected Yield on govt No. of to become Average No. of years corporate (years) employees entitled annual salary until vesting bonds 100 20 $46000 6% $48000 6% $50 000 5% $52 500 $55 600 credit 1 2 9 8 7 3 4 5 85 40 32 25 26 35 50 65 6 5% 5% 5 Additional information The estimated annual increase in retail wages is 5% p.a. for the next 10 years, reflecting Bluebird Ltd's policy of increasing salaries of its debt collection staff for each year of additional experience. At 30 June 2021, the provision for long service leave for non- managerial debt collection staff was $132 000. Required Prepare the journal entry to account for Bluebird Ltd's provision for long service leave at 30 June 2022 in relation to the non- managerial employees of the company's debt collection business
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