Dervish Ltd Has an Average Weekly Payroll of $700 000

question 63

Multiple Choice

Dervish Ltd has an average weekly payroll of $700 000.The employees are entitled to 2 weeks',non-vesting sick leave per annum.Past experience suggests that 66% of employees will take the full 2 weeks' sick leave and 15% will take 1 week's leave each year.The rest of the employees take no sick leave.What weekly entry would Dervish make in relation to sick leave?

• A)
• \[\begin{array} { | l | l | l | l | }
• \hline \mathrm { Dr } & \text { Sick leave expense } & 1029000 & \\
• \hline \mathrm { Cr } & \text { Provision for sick leave } & & 1029000 \\
• \hline
• \end{array}\]
• B) No weekly entry is required.
• C)
• \[\begin{array} { | l | l | r | r | }
• \hline \mathrm { Dr } & \text { Sick leave expense } & 567000 & \\
• \hline \mathrm { Cr } & \text { Sick leave payable } & & 567000 \\
• \hline
• \end{array}\]
• D)
• \[\begin{array} { | l | l | r | r | }
• \hline \mathrm { Dr } & \text { Sick leave expense } & 19789 & \\
• \hline \mathrm { Cr } & \text { Provision for sick leave } & & 19789 \\
• \hline
• \end{array}\]

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