BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

Solutions

Chapter
Section
BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Accrued vacation pay

A business provides its employees with varying amounts of vacation per year, depending on the length of employment. The estimated amount of the current year’s vacation pay is $54,000.

  1. a. Journalize the adjusting entry required on January 31, the end of the first month of the current year, to record the accrued vacation pay.
  2. b. How is the vacation pay reported on the company’s balance sheet? When is this amount removed from the company’s balance sheet?

A.

To determine

Vacation expense: Vacation expense is an estimated expense for the company which the company should pay to the employees as extra salary over the entire year. For example: If an employee works 49 weeks in a year, company should pay 3 weeks’ (52 weeks  49 weeks) extra salary as a vacation expense.

To journalize: The adjusting entry to record the accrued vacation pay.

Explanation

Working note:

Calculate vacation pay expense for January.

Vacationpayexpense=Annualvacation12months=</

B.

To determine

To explain: how vacation pay is reported on the company’s balance sheet and when it is removed from the company’s balance sheet.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What are the two main causes of market failure? Give an example of each.

Brief Principles of Macroeconomics (MindTap Course List)

Identify and describe the three steps in the delegation process.

Foundations of Business (MindTap Course List)

Give two differences between ASP and SaaS.

Accounting Information Systems

How can you compute the future value of a single sum?

Intermediate Accounting: Reporting And Analysis

How does a cost-efficient capital market help reduce the prices of goods and services?

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)