ANOMALOUS IRREGULAR Co. grants its employees twelve days paid vacation leave each year. Per ANOMALOUS's policy, employees are required to take vacation leave each year, but not necessarily for their entire vacation leave entitlement. Vacation leaves not taken during a year can be carried over indefinitely. ADHERE has 500 employees with an average salary of P4,000 per day. The average annual pay increase is 5%. During 20x1, total vacation leaves taken by employees were 5,400 days. Based on past experience, 90% of unused vacation leave for a year are taken in the immediately following year. Assume that unused vacation leaves vest, how much should ANOMALOUS accrue as liability for unused vacation leave on December 31, 20x1?
ANOMALOUS IRREGULAR Co. grants its employees twelve days paid vacation leave each year. Per ANOMALOUS's policy, employees are required to take vacation leave each year, but not necessarily for their entire vacation leave entitlement. Vacation leaves not taken during a year can be carried over indefinitely. ADHERE has 500 employees with an average salary of P4,000 per day. The average annual pay increase is 5%. During 20x1, total vacation leaves taken by employees were 5,400 days. Based on past experience, 90% of unused vacation leave for a year are taken in the immediately following year. Assume that unused vacation leaves vest, how much should ANOMALOUS accrue as liability for unused vacation leave on December 31, 20x1?
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 6MC
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Transcribed Image Text:ANOMALOUS IRREGULAR Co. grants its employees twelve days paid vacation leave each year. Per
ANOMALOUS's policy, employees are required to take vacation leave each year, but not necessarily for their
entire vacation leave entitlement. Vacation leaves not taken during a year can be carried over indefinitely.
ADHERE has 500 employees with an average salary of P4,000 per day. The average annual pay increase is
5%. During 20x1, total vacation leaves taken by employees were 5,400 days. Based on past experience, 90%
of unused vacation leave for a year are taken in the immediately following year.
Assume that unused vacation leaves vest, how much should ANOMALOUS accrue as liability for unused
vacation leave on December 31, 20x1?
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