Poseidon Sail Ltd granted 300,000 options to its CEO Artemis Lee The options vest in the first year if Poseidon Sail Ltd makes a return on assets of 12 in year 1, in the second year if Poseidon Sail Ltd makes an average return on assets of 10 across the first two years otherwise they vest over three years As at the time they were granted, the options are worth $5 each At the end of the first year, Poseidon Sail Ltd made a return on assets of 8 and forecasted the same return on assets for the next two years However, due to Artemis Lees hard work, Poseidon Sail Ltd made a return on assets of 13 in year 2 and 3 Required Record the journal entries (if any) relating to the options for each of the three years and show your workings (3 marks) Year 1 Details Debit $ Credit $ Year 2 Details Debit $ Credit $ Year 3 Details Debit $ Credit $ Poseidon Sail Ltd employs its staff on five day working weeks, with employees paid weekly on Fridays in arrears Poseidon Sail Ltd has a total weekly employee expense of $26,000 and retains $8,000 to pay the Inland Revenue Department for pay as you earn (PAYE) tax on behalf of the employees $1,000 is also retained as KiwiSaver contributions These are both paid on the Wednesday in following week after employees are paid As required by law, employees receive four weeks annual leave each year Required Prepare the journal entries that Poseidon Sail Ltd would record each week when paying its employees and to recognise the annual leave obligation (assuming 52 weeks in a year) Show your workings (2 marks) Journal entry for wages and salaries Details Debit $ Credit $ Journal entry for annual leave obligation Details Debit $ Credit $ Several long serving employees in Poseidon Sail Ltd are also eligible for long service leave Required Identify TWO assumption the manager has to make to calculate the provision for long service leave and explain how these assumptions may affect the usefulness of the provision of long service leave information reported in the financial statements (3 marks)

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Poseidon & Sail Ltd granted 300,000 options to its CEO Artemis Lee. The options vest in the first year if Poseidon & Sail Ltd makes

Poseidon & Sail Ltd granted 300,000 options to its CEO Artemis Lee. The options vest in the first year if Poseidon & Sail Ltd makes a return on assets of 12% in year 1, in the second year if Poseidon & Sail Ltd makes an average return on assets of 10% across the first two years; otherwise they vest over three years. As at the time they were granted, the options are worth $5 each. At the end of the first year, Poseidon & Sail Ltd made a return on assets of 8% and forecasted the same return on assets for the next two years. However, due to Artemis Lees hard work, Poseidon & Sail Ltd made a return on assets of 13% in year 2 and 3.

Required

Record the journal entries (if any) relating to the options for each of the three years and show your workings. (3 marks)

Year 1

Details	Debit $	Credit $

Year 2

Details	Debit $	Credit $

Year 3

Details	Debit $	Credit $

Poseidon & Sail Ltd employs its staff on five-day working weeks, with employees paid weekly on Fridays in arrears. Poseidon & Sail Ltd has a total weekly employee expense of $26,000 and retains $8,000 to pay the Inland Revenue Department for pay-as-you-earn (PAYE) tax on behalf of the employees. $1,000 is also retained as KiwiSaver contributions. These are both paid on the Wednesday in following week after employees are paid. As required by law, employees receive four weeks annual leave each year.

Required

Prepare the journal entries that Poseidon & Sail Ltd would record each week when paying its employees and to recognise the annual leave obligation (assuming 52 weeks in a year). Show your workings. (2 marks)

Journal entry for wages and salaries

Details	Debit $	Credit $

Journal entry for annual leave obligation

Details	Debit $	Credit $

Several long-serving employees in Poseidon & Sail Ltd are also eligible for long service leave.

Required

Identify TWO assumption the manager has to make to calculate the provision for long service leave and explain how these assumptions may affect the usefulness of the provision of long service leave information reported in the financial statements. (3 marks)