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The following information relates to Question I and II The employees of ABC Ltd are...

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Accounting

The following information relates to Question I and II

The employees of ABC 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 on 30 June 2020.

Years of service as on 30 June 2020 Number of employees as on 30 June 2020 Average annual salaries for 2019-2020 Average projected annual salaries when leave is due Probability of becoming unconditionally entitled to long service leave
4 1 $50,000 $80,000 0.35
16 3 $70,000 $70,000 1.00

The long-service leave liability reported for the year ended 30 June 2019 was $30,360. The following high-quality corporate bond rates have been identified.

Period to maturity Corporate bond rate (%)
4 years 4
11 years 8
16 years 11

Question I: What is the balance of provision for long-service leave related to the employees with 4 years of service on 30 June 2020?

A) $801

B) $1,601

C) $2,744

D) $3,202

E) $5,488

Your answer to Question I: ABCDE

Question II: What is the balance of provision for long-service leave related to the employees with 16 years of service on 30 June 2020?

A) $18,667

B) $37,334

C) $50,450

D) $56,000

E) $74,668

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