Delta Limited (Delta) prepares its financial statements to 30 September each year. The financial statements for the year ended 30 September 2020 are shortly to be authorised for issue. The following events are relevant to these financial statements:

Delta operates a defined benefit retirement benefits plan on behalf of current and former employees. Delta receives advice from actuaries regarding contribution levels and overall liabilities of the plan to pay benefits. On 1 October 2019, the actuaries advised that the present value of the defined benefit obligation was $60 million. On the same date, the fair value of the assets of the defined benefit plan was $52 million. On 1 October 2019, the annual market yield on high quality corporate bonds was 8%, 12% on 30^th September 2020 while the average for the year was 10%.

During the year ended 30 September 2020, Delta made contributions of $10 million into the plan and the plan paid out benefits of $7.0 million to retired members. You can assume that both these payments were made on 30 September 2020.

The actuaries advised that the current service cost for the year ended 30 September 2020 was $72 million. On 31 August 2020, the rules of the plan were amended with retrospective effect considering the tough economic situation prevailing in the country. These amendments meant that the present value of the defined benefit obligation was a reduction by $15 million from that date.

During the year ended 30 September 2020, Mr. Kristoff who has been the MD retired and was due to return to his Native land in New Zealand. The Board in its meeting of 30^th September 2020 agreed to pay him $75 million in compensation for the curtailment of his pension benefits. These payments were made from the assets of the retirement benefits plan and excluded other benefits which were paid as per the company policies. The impact of these payments was to reduce the present value of the defined benefit obligation by $7 million. The payments were made on 30^th September 2020.

On 30 September 2020, the actuaries advised that the present value of the defined benefit obligation was $60 million. On the same date, the fair value of the assets of the defined benefit plan were $54 million.

Delta Limited operates on a five-day working week. The conditions of employment at Delta Limited stipulate that each employee is entitled to 20 paid working days vacation per annum. The employee profile and recent leave statistics are as follows:

Number of employees at this annual salary	Per employee (on average)
	Annual salary	Year-end 30 Sept 2019 unused 2019 vacation days	Year-end 30 Sept 2020 days vacation taken	Forecasted Year ended 30 Sep 2021 days vacation taken
10 000	R60 000	10	14 (9 earned in 2019 & 5 earned in 2018	15 (12 earned in 2020 & 3 earned in 2019)

Additional information:

No employees joined or left the company for the past two years.

Management has accurately forecasted the number of days vacation to be taken in the following year for several years.

Salaries were increased by 20% on 1 October 2020. Ignore public holidays.

Vacation leave is carried forward to the next financial year (i.e., accumulating) but falls away if not used by the end of the next financial year (i.e., non-vesting).

REQUIRED

Record the above transactions using Journal entries relating to the Defined Benefits Plan and accrued leave days. The accounts must show the respective statement i.e., SPL, SFP, SCO, SCE, SCF. Please note that narrations are required. (12 Marks)

Show how Delta would disclose its employee benefits costs in the SPLOCI and SFP as of 30^th September 2020. Ignore accounting policy notes and descriptions of the DB pension fund. (8 Marks)

Calculate the amount to be accrued in respect of vocational days as of 30 September 2020 (5 Marks)