Question 4 &nbs

Question 4 10 Marks

Tiger Ltd commenced operations on 1 July 2019 and has one employee, Brian King, who commenced employment on 1 July 2019. During the year ended 30 June 2020, Brian was paid $600 per week (an annual salary of $31,200). Hisonly weekly deductions were $150 for PAYG tax instalments. Brian has an entitlement to four weeks’ annual leave each year and a 17.5% annual leave loading. The annual leave is accumulating and vesting. During the year ended 30 June 2020, Brian took one week of annual leave. The PAYG tax deducted for this week was $175.

Brian also has an entitlement to eight days sick leave each year. The sick leave is non-accumulating and non-vesting. During the year ended 30 June 2020, Brian took twodays’ sick leave.

Required

Provide the journal entries for the one week of annual leave taken by Brian King during the year ended 30 June 2020. (3marks)

What is the amount of annual leave expense recognised by Tiger Ltd during the year ending 30 June 2020? What is the balance in the provision for annual leave as at 30 June 2020?

Assume that the annual leave is non-accumulating. Provide the journal entries for the one week of annual leave taken by Brian Kingduring the year ended 30 June 2020.

Provide the journal entry for the two days’ sick leave taken by Brian King during the year ended 30 June 2020.

Expert Solution

Journal Entry
a. (i)	01-07-19	Annual Leave Expenses A/c Dr.	$ 2,400.00
		To Provision for annual Leave A/c		$ 2,400.00
		(Being Leave Accrued)

	30-06-20	Provision for annual leave A/c Dr.	$ 600.00
		To Brain King's A/c		$ 600.00
		(Being Leave used)

a. (ii)	30-06-20	Brain King's A/c Dr.	$ 600.00
		To Cash		$ 450.00
		To PAYG Tax Installment		$ 150.00
		(Being cash paid for leave taken)

b.		Amount of annual leave expenses recognised by Tiger Ltd.	$ 2,400.00
		Balance in the provision for annual leave	$ 1,800.00

c.		If annual leave is non accumulating

(i)	30-06-20	Annual Leave Expenses A/c Dr.	$ 600.00
		To Brain King's A/c		$ 600.00
		(Being Leave used)

(ii)	30-06-20	Brain King's A/c Dr.	$ 600.00
		To Cash		$ 450.00
		To PAYG Tax Installment		$ 150.00
		(Being cash paid for leave taken)



d.		sick leave taken

		Sick Leave Expenses A/c Dr.	$ 240.00
		To Brain King's A/c		$ 240.00
		Note: Assuming that 5 days are working in a week
		(Being Sick Leave taken)

		Brain King's A/c Dr.	$ 240.00
		To Cash		$ 240.00
		(Being sick leave paid for 2 days)

ekkarill92 answered 2 years ago

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