Calculate the expected annual sick-leave expense for Dainty Ltd (on the basis of average salaries). b) Provide the journal entry necessary to recognize the sick-leave entitlement expense as it accrues each week. c) In the current week an employee with a weekly salary of $600 has been off sick for the first time this year. The employee took 2 days off out of her normal 5-day working week. Assuming that PAYG tax is deducted at 30%, what would the entry be to record the employee's weekly salary (round amounts to the nearest dollar)?
Dainty Ltd has an average weekly payroll of $200 000. The employees are entitled to 2 weeks', nonvesting sick leave per annum. Past experience suggests that 56% of employees will take the full 2
weeks' sick leave and 22% will take 1 week's leave each year. The rest of the employees take no sick
leave.
Required:
a) Calculate the expected annual sick-leave expense for Dainty Ltd (on the basis of average salaries).
b) Provide the
each week.
c) In the current week an employee with a weekly salary of $600 has been off sick for the first time
this year. The employee took 2 days off out of her normal 5-day working week. Assuming that PAYG
tax is deducted at 30%, what would the entry be to record the employee's weekly salary (round
amounts to the nearest dollar)?
a)
56% of employees will take 2 weeks of sick Leave
= $200,000 x 2 x 22%
= $200,000 x 2 x 0.22
= $88,000
Annual sick leave Expense
= $224,000 + $88,000
= $312,000
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