A company gives each of its 50 employees (assume they were all employed continuouslythrough 2020 and 2021) 12 days of vacation a year if they are employed at the end of theyear. The vacation accumulates and may be taken starting January 1 of the next year.The employees work 8 hours per day. In 2020, they made $17.50 per hour and in 2021they made $20 per hour. During 2021, they took an average of 9 days of vacation each.The company's policy is to record the liability existing at the end of each year at thewage rate for that year. What amount of vacation liability would be reflected on the2020 and 2021 balance sheets, respectively?Select one:a. $96,000; $120,000b. $96,000; $117,000O c. $84,000; $120,000O d. $84,000; $117,000

Vacation Liability is a provision which is created to write-off expenditure which arises because of…

Answered: A company gives each of its 50…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 4RE

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On January 1, 2019, FrankKeating Company decided to grant its employees 10 vacation days and five sick days each year. Vacation days are earned can be carried over to the next year but not sick days. Each employee took an average of four sick days in 2019. During the year, each of Mike’s sixty employees earned P300 per day (increases by 5% each year) and had three unused vacation pays as of yearend. How much is the Vacation Pay Expense? How much is the Sick Pay Expense? How much is the Liability for Compensated Absences?
A company gives each of its 50 employees (assume they were all employed continuously through 2020 and 2021) 12 days of vacation a year if they are employed at the end of the year. The vacation accumulates and may be taken starting January 1 of the next year. The employees work 8 hours per day. In 2020, they made $17.50 per hour and in 2021 they made $20 per hour. During 2021, they took an average of 9 days of vacation each. The company’s policy is to record the liability existing at the end of each year at the wage rate for that year. What amount of vacation liability would be reflected on the 2020 and 2021 balance sheets, respectively? Select one: $96,000; $117,000 $96,000; $120,000 $84,000; $120,000 $84,000; $117,000
Beginning 2019, Maigo and Maika Company grant 15 days of vacation a year to each of the 100 employees if they are still employed at the end of the year. The vacation accumulates and may be taken starting January 1 of the following year. The employees work 8 hours a day. The rate for all employees during 2019, 2020, and 2021 are P70, P75 and P80 per hour, respectively. During 2020 and 2021, the employees each used an average of 5 and 8 vacation days, respectively. The entity’s policy is to record the liability existing at the end of each year at the wage rate for the current year. 1. What amount should be reported as vacation liability on December 31, 2019, 2020 and 2021?2. What amount should be reported as vacation pay expense on December 31, 2019, 2020, and 2021, respectively?
A company gives each of its 80 employees (assume they were all employed continuously through 2020 and 2021) 12 days of vacation a year if they are employed at the end of the year. The vacation accumulates and may be taken starting January 1 of the next year. The employees work 8 hours per day. In 2020, they made $17.50 per hour and in 2021 they made $21 per hour. During 2021, they took an average of 9 days of vacation each. The company’s policy is to record the liability existing at the end of each year at the wage rate for that year. What amount of vacation liability would be reflected on the 2020 and 2021 balance sheets, respectively?
Bailey Corporation began business on January 2, 2019, with five employees. Its sick leaveand vacation policy follow: Each employee is allowed 8 days of sick leave each year and one dayof paid vacation leave for each month worked. The accrued vacation cannot be taken until theemployee has been with the company 1 year. The sick leave, if not used accumulates to an 18-day maximum. The vacation leave accumulates for 5 years, but at any time the employee mayrequest compensation in lieu of taking paid vacation leave. The company records its liability forboth compensated absences on a quarterly basis. The daily gross wages for each employee are$180.Instructions:1. Prepare the journal entries to record the compensated absences for the first quarter of 2019.Three sick days were used by employees in the first quarter.2. Prepare a partial interim balance sheet showing the liability balances for compensatedabsences at March 31, 2019.
Rexallo Company begins business on January 2, 2019, with 15 employees. Its company policy is to permit each employee to take 6 days of paid sick leave each year and 1½ days of paid vacation leave for each month worked. The sick leave, if not used, accumulates to a 24-day maximum. The vacation leave accumulates for 2 years, but at any time after a 1-year period, the employee may request additional compensation in lieu of taking paid vacation leave. Rexallo prefers to record the liability for compensated absences on a quarterly basis. Assume that the gross salaries for each employee are $100 per day. The following selected events take place during the first two quarters of 2019: • On March 31, 2019, the quarterly liability for compensated absences is to be recorded. • On April 30, 2019, the following $45,000 monthly payroll, including paid vacation and sick leave, is summarized from Rexallo’s records: Payroll for Time Worked Vacation Taken Sick Leave…
Bettinghaus Corporation began business on January 2, 2019, with five employees. Its sick leave and vacation policy follows: Each employee is allowed 8 days of paid sick leave each year and one day of paid vacation leave for each month worked. The accrued vacation leave cannot be taken until the employee has been with the company 1 year. The sick leave, if not used, accumulates to an 18-day maximum. The vacation leave accumulates for 5 years, but at any time the employee may request additional compensation in lieu of taking paid vacation leave. The company records its liability for both compensated absences on a quarterly basis. The daily gross wages for each employee are $160. Required: 1. Prepare journal entries to record the liability for compensated absences for the first quarter of 2019. Assume no sick leave had been taken by the employees. 2. Prepare a partial interim balance sheet showing how the liability created in Requirement 1 would be reported on March 31, 2019.
Employees of Robert and Jesse Company are entitled to two weeks of paid vacation leave. In 2018, the employees earned 100 weeks of vacation leaveand used 70 weeks. On the average, the employees are paid P 2,000 per week and the salary is expected to increase by P 200 per week next year.1. If the benefits were accumulating and vesting, the vacation pay expense and liability shall be2. If the benefits were NONaccumulating and NONvesting, the vacation pay expense and liability shall be

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