Question
Question 9 Bluebell Ltd provides credit services. Bluebell Ltd provides its employees with long service leave entitlements of 13 weeks of paid leave for every
Question 9
Bluebell Ltd provides credit services. Bluebell 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/IAS 19. The following information is obtained from Bluebell Ltd's payroll records and actuarial reports for the non-managerial staff of its debt collection business at 30 June 2019.
Unit
credit
(years)No. of
employees% expected to
become
entitledAverage
annual
salary
$No. of
years until
vestingYield on govt.
corporate
bonds
%
11202066,000962802668,000873503570,000744305072,500675257075,60056
Additional information(a)The estimated annual increase in retail wages is 7% p.a. for the next 10 years, reflecting Bluebell Ltd's policy of increasing salaries of its debt collection staff for each year of additional experience.(b)At 30 June 2018, the provision for long service leave for non-managerial debt collection staff was $130,000.
Prepare the journal entry to account for Bluebell Ltd's provision for long service leave at 30 June 2019 in relation to the non-managerial employees of the company's debt collection business.(Enter debit entries first, followed by credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round discount factors to 6 decimal places e.g. 0.527512 and final answers to 0 decimal places, e.g. 5,275.)
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