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Question - Accounting for employee benefits: Resolution Lid has a total weekly payroll of $80,000. It provides its 40 employees with 10 working days accumulating sick leave entitlement each year. Ten of these employees are entitled to vesting sick leave and the amount of the weekly payroll attributable to them is $10,000. The remaining 30 employees, who account for $70,000 of the payroll, are entitled to non-vesting sick leave. Experience suggest that 85% of these employees will take their full sick leave entitlement each year.
Required -
a. Calculate the annual sick leave expense for Resolution Lid (show all workings).
b. Prepare the journal entry for the first week of the new financial year.
c. Distinguish between besting and non-vesting sick leave.
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