Calculate the balances for the employee benefits liabilities

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Reference no: EM132705995

XYZ Ltd is calculating one of its employee benefits liabilities. Jacob Anton is one of the managerial staff at the XYZ Ltd head office and you are the payroll trainee accountant asked to calculate the Jacob's employee benefits liability as at 30th June 2020.

Additional information:

Employee name: Jacob Anton
Years of employment with XYZ as at 30/6/2020: 8 years
Current salary (per year): $90,000
Annual leave outstanding at 30 June 2020: 5 days (1 week)
Salary increases are expected to be 3%, in line with inflation.
The annual leave entitlement is 20 days per calendar year. Jacob is expected to take all the annual leave as he is entitled to the coming financial year. He receives annual leave loading of 17.5 per cent.
Jacob's long service leave (LSL) entitlement is 10 weeks leave for 12 years of service. However, he is entitled for pro rata payout at 10th year
Given his period of service, there is a 55% likelihood Jacob will remain with XYZ for next four years.
The appropriate bond rates from Reserve Bank of Australia (RBA) are:
For bonds with a 2-year maturity, the rate is 4%.
For bonds with a 4-year maturity, the rate is 5%.

Required:

Problem 1: Calculate the balances for the employee benefits liabilities (Long service leave and annual leave separately) for Jacob as at 30 June 2020.

Reference no: EM132705995

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