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Melbourne Pty Ltd has an average weekly payroll of $600,000. The employees receive entitlements to two weeks sick leave per year. The sick leave entitlements are classified as non-vesting. Past experience suggests that 50% of employees will use their full two weeks entitlements each year, 25% of employees will take one weeks sick leave each year and 15% of employees will take one day's sick leave each year.
Problem A. Calculate the expected sick leave expense for Melbourne Pty Ltd (on the basis of average salaries).
Problem B. Provide the monthly journal entries necessary to recognise the sick leave entitlement expense as it accrues.
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