PAS 19 Part 1 - Employee Benefits PDF

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Audit of Employee Benefits Acctg 16Problem I. Discussion Questions 1. Define the following terms: a. Short-term employee benefits b. Defined Contribution Plan c. Defined Benefit Plan d. Other long term employee benefits e. Termination benefits How are the items above being accounted for under the st...

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Audit of Employee Benefits Acctg 16 Problem I. Discussion Questions 1. Define the following terms: a. Short-term employee benefits b. Defined Contribution Plan c. Defined Benefit Plan d. Other long term employee benefits e. Termination benefits 2. How are the items above being accounted for under the standard Philippine Accounting Standards No. 19? Problem II. Short-term employee benefits The Tyrell Corporation began operations on January 1, 2019 with 250 employees. The company provides its employees 2 weeks paid sick leave and 2 weeks paid vacation leave every operating year. The company’s policy on sick leave and vacation leave allows each employee to carry over accumulated leaves for the current period over the next year only. The same shall be forfeited if not availed over the said period allowed. On December 31, 2019, records showed that there are 55 employees who are yet to avail of any leave, while there are 25 employees who have 2 weeks remaining unused vacation and sick leave combined. Employees had an average daily wage rate of P250. On December 31, 2020, records showed that 925 days vacation and sick leaves carried over from the last operating period were exercised and paid in 2020. In addition, there are 30 employees who have 6 weeks accumulated unused sick leaves and vacation leaves combined, 25 employees who have accumulated 3 weeks unused sick leaves and 2 weeks unused vacation leaves; 30 employees who have accumulated 3 weeks unused sick leaves and vacation leaves combined; 10 employees who have accumulated 1 week unused sick leave. The daily wage rate is now P275. Required: a. How much liability for compensated absences should be included as part of current liabilities as of December 31, 2019? b. How much liability for compensated absences should be included as part of current liabilities as of December 31, 2020? c. How much is the net adjustment for the accrual for the year ended 2020? Problem III. Profit sharing A profit sharing plan requires Glennson Company to pay a specific proportion of its net income for the year to employees who worked throughout the year. If no employees leave during the year, the total profit sharing payments for the year will be 3% of net income. Staff turnover will reduce the payments proportionately. The number of employees at December 31, 2019 was 100. 10 employees have left during 2020. The net income for 2020 was P1,000,000 Required: Calculate the amount of liability for profit sharing at the end of 2020....