Employee Salary Projection: Accumulations for the Benefits - Paper Example

Name of Employee Salary projection Accumulations for the Benefits (LSL) PV LSL Probability LSL for pay (%) Liability for LSL

Black 48760 1563 724 15 109

White 46866 3004 1748 20 350

Brown 56308 5415 3711 50 1856

Green 64945 8326 6595 70 4617

Purple 72828 11672 10423 90 9384

Total 16315

1) Current salary x (1 + inflation rate) n, where n = number of years until the long service leave entitlement vests. In this question it is assumed that the inflation rate proxies for the growth rate for wages and will continue to be 2%. For Black, the calculation is $40,000 x (1.02)10 = $48,760. 2.

2) Dr Long-service leaves expense 3,814

Cr Provision for long-service leaves 3,814

Solution 4

Statement of Cash Flow

Solution 4 2020

Turnover 31,650.00

Cost of sales (26,000.00)

Gross profit 5,650.00

Depreciation (450.00)

Administrative and selling expenses (950.00)

Interest expense (400.00)

Investment income 500.00

Profit before taxation 4,350.00

Taxes on income (300.00)

Profit 4,050.00

Dividends paid (1,200.00)

Retained Earnings 2,850.00

Balance Sheet 2020

Assets Cash and cash equivalents 1,230.00

Accounts receivable 1,800.00

Interest receivable 100.00

Inventory 2,200.00

Portfolio investments 2,500.00

Property, plant and equipment at cost 3,730.00

Accumulated depreciation (1,450.00)

Property, plant and equipment net 2,280.00

Total assets 10,110.00

Liabilities Trade payables 250.00

Interest payable 230.00

Income taxes payable 400.00

Dividends payable 1,200.00

Long term debt 2,300.00

Total liabilities 4,380.00

Shareholders equity Share capital 1,500.00

Retained earnings 4,230.00

Total shareholders equity 5,730.00

Total liabilities and shareholders equity 10,110.00

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Additional Information 2020

Business Acquisitions Values Inventories 100.00

Accounts receivable 100.00

Cash 40.00

Property, plant and equipment 650.00

Trade payables (100.00)

Long-term debt (200.00)

590.00

Disposal of Property, Plant & Equipment Cost 80.00

Accumulated Depreciation (60.00)

Book value 20.00

Proceeds 70.00

Profit / (Loss) on sale of equipment 50.00

Long Term Debt Loans raised 250.00

Finance lease acquisitions 900.00

1,150.00

Solution 5

30th April Purchase 37500 A$

Accounts Payable 37500 A$

30th May Accounts Payable 12500 A$

Cash 11682 A$

Foreign Exchange Gain 818 A$

30th June Accounts Payable 12500 A$

Cash 11641 A$

Foreign Exchange Gain 859 A$

31st July Accounts Payable 12500 A$

Cash 11186 A$

Foreign Exchange Gain 1314 A$

30th April Equipment 31250 A$

Accounts Payable 31250 A$

31st July Accounts Payable 31250 A$

Cash 19230 A$

Foreign exchange gain 12019 A$