Question 3 Employee Benefits (16 marks) Part A (8 marks) The employees of Brown Ltd are entitled to 13 weeks long service leave after 15 years continuous service. The following information has been compiled for calculating the liability for long-service leave as at 30 June 2018 Probability of becoming unconditionally Aggregate projected Number of Aggregate Years of employees as at 30 June annual service as at annual salaries for entitled to 30 June 2018 salaries when 2018 2017-2018 long-service leave is due leave 4 22 940 000 0.35 550 000 2 80 000 1.00 16 80 000 Total S630 000 $1 020 000 24 The long-service leave liability reported for the year ended 30 June 2017 was $22 360 The following government and corporate bond rates have been identified. Government bond rate Period to maturity Corporate bond rate (%) (%) 3 3 years 4 years 3.5 4 3.5 11 years 8 7 12 years 8 10 16 years 11 REQUIRED: Prepare the general journal entries for the year ended 30 June 2018 to provide for long service leave for employees in accordance with the requirements of AASB 119. Show all calculations. Round to the nearest $ amount Part B (8 marks) Briefly explain the situations when the recognition of liabilities or assets for defined contribution and defined benefit post-employment plans is required in accordance with AASB 119 Question 3 Employee Benefits (16 marks) Part A (8 marks) The employees of Brown Ltd are entitled to 13 weeks long service leave after 15 years continuous service. The following information has been compiled for calculating the liability for long-service leave as at 30 June 2018 Probability of becoming unconditionally Aggregate projected Number of Aggregate Years of employees as at 30 June annual service as at annual salaries for entitled to 30 June 2018 salaries when 2018 2017-2018 long-service leave is due leave 4 22 940 000 0.35 550 000 2 80 000 1.00 16 80 000 Total S630 000 $1 020 000 24 The long-service leave liability reported for the year ended 30 June 2017 was $22 360 The following government and corporate bond rates have been identified. Government bond rate Period to maturity Corporate bond rate (%) (%) 3 3 years 4 years 3.5 4 3.5 11 years 8 7 12 years 8 10 16 years 11 REQUIRED: Prepare the general journal entries for the year ended 30 June 2018 to provide for long service leave for employees in accordance with the requirements of AASB 119. Show all calculations. Round to the nearest $ amount Part B (8 marks) Briefly explain the situations when the recognition of liabilities or assets for defined contribution and defined benefit post-employment plans is required in accordance with AASB 119