GHI Company compensates its employees for certain absences for vacation and sickness. Employees are entitled to one day vacation plus one day sick leave for each month worked during the year. Unused vacation days may be carried forward, but unused sick leave does not accumulate. Employees are compensated according to their pay in effect at the time of the leave. The following data were taken from the records for the year 2021. Employee Date of initial employment Unused vacation 1/1/2021 Vacation taken in 2021 Sick leave taken in 2021 Rate per day Rj 1/10/2019 18 8 5 1,000 Pinky 7/28/2020 5 4 10 800 Janus 9/1/2021 0 2 6 600 Noli 8/1/2021 0 3 5 400 Required: 1. Compute the balance of the account Liability for CompensatedAbsencesat December 31, 2020. 2. Compute the amount of Employee benefit expense for sick leave and vacation leave forthe year 2021. 3. Compute the balance of liability for compensatedabsences at December 31, 2021.
GHI Company compensates its employees for certain absences for vacation and sickness. Employees are entitled to one day vacation plus one day sick leave for each month worked during the year. Unused vacation days may be carried forward, but unused sick leave does not accumulate. Employees are compensated according to their pay in effect at the time of the leave. The following data were taken from the records for the year 2021. Employee Date of initial employment Unused vacation 1/1/2021 Vacation taken in 2021 Sick leave taken in 2021 Rate per day Rj 1/10/2019 18 8 5 1,000 Pinky 7/28/2020 5 4 10 800 Janus 9/1/2021 0 2 6 600 Noli 8/1/2021 0 3 5 400 Required: 1. Compute the balance of the account Liability for CompensatedAbsencesat December 31, 2020. 2. Compute the amount of Employee benefit expense for sick leave and vacation leave forthe year 2021. 3. Compute the balance of liability for compensatedabsences at December 31, 2021.
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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Question
GHI Company compensates its employees for certain absences for vacation and sickness. Employees are entitled to one day vacation plus one day sick leave for each month worked during the year. Unused vacation days may be carried forward, but unused sick leave does not accumulate. Employees are compensated according to their pay in effect at the time of the leave.
The following data were taken from the records for the year 2021.
| Employee | Date of initial employment |
Unused vacation 1/1/2021 |
Vacation taken in 2021 |
Sick leave taken in 2021 |
Rate per day |
| Rj | 1/10/2019 | 18 | 8 | 5 | 1,000 |
| Pinky | 7/28/2020 | 5 | 4 | 10 | 800 |
| Janus | 9/1/2021 | 0 | 2 | 6 | 600 |
| Noli | 8/1/2021 | 0 | 3 | 5 | 400 |
Required:
1. Compute the balance of the account Liability for CompensatedAbsencesat December 31, 2020.
2. Compute the amount of Employee benefit expense for sick leave and vacation leave forthe year 2021.
3. Compute the balance of liability for compensatedabsences at December 31, 2021.
4. Prepare the entry to recordthe 2021 transactions.
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