Xuan Xuan current salary is $79000 per anum. it is expected that her salary will increase at the forecast inflation rate of 3% per annum. Xuan Xuan Joined ABC Ltd on 1 July 2017. All employees of the ABC Ltd are entitled to a 13-week long service leave when they complete 10 years of service. The discount rate for high quality corporate bonds with 3 years and 7 years to maturity is 6% and 8% respectively, and the likelihood of Xuan Xuan staying with the company until 30 June 2027 is 35%. Calculate the provision required for long service for Xuan Xuan at 30 June 2020?
Xuan Xuan current salary is $79000 per anum. it is expected that her salary will increase at the forecast inflation rate of 3% per annum. Xuan Xuan Joined ABC Ltd on 1 July 2017. All employees of the ABC Ltd are entitled to a 13-week long service leave when they complete 10 years of service. The discount rate for high quality corporate bonds with 3 years and 7 years to maturity is 6% and 8% respectively, and the likelihood of Xuan Xuan staying with the company until 30 June 2027 is 35%. Calculate the provision required for long service for Xuan Xuan at 30 June 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Xuan Xuan current salary is $79000 per anum. it is expected that her salary will increase at the forecast
inflation rate of 3% per annum. Xuan Xuan Joined ABC Ltd on 1 July 2017. All employees of the ABC Ltd
are entitled to a 13-week long service leave when they complete 10 years of service. The discount rate
for high quality corporate bonds with 3 years and 7 years to maturity is 6% and 8% respectively, and the
likelihood of Xuan Xuan staying with the company until 30 June 2027 is 35%. Calculate the provision
required for long service for Xuan Xuan at 30 June 2020?
a. 1488
b. 4254
c. 1265
d. 1799
e. 4961](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8310992c-2398-4983-b91f-1a40a0da9b99%2F9c915c97-b91f-412c-9f15-a8f2b49bab6e%2Fek5uiis_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Xuan Xuan current salary is $79000 per anum. it is expected that her salary will increase at the forecast
inflation rate of 3% per annum. Xuan Xuan Joined ABC Ltd on 1 July 2017. All employees of the ABC Ltd
are entitled to a 13-week long service leave when they complete 10 years of service. The discount rate
for high quality corporate bonds with 3 years and 7 years to maturity is 6% and 8% respectively, and the
likelihood of Xuan Xuan staying with the company until 30 June 2027 is 35%. Calculate the provision
required for long service for Xuan Xuan at 30 June 2020?
a. 1488
b. 4254
c. 1265
d. 1799
e. 4961
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