menu
bartleby
search
close search
Hit Return to see all results
close solutoin list

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. 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. b. How is the vacation pay reported on the company’s balance sheet? When is this amount removed from the company’s balance sheet?

BuyFindarrow_forward

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124

Solutions

Chapter
Section
BuyFindarrow_forward

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124
Chapter 11, Problem 17E
Textbook Problem
242 views

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

Journalize the adjusting entry to record the accrued vacation pay.

Explanation of Solution

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.

Prepare journal entry to record accrued vacation pay.

DateAccounts and ExplanationPost RefDebit ($)Credit ($)
January 31Vacation Pay Expense 4,500
Vacation Pay Payable 4,500
    (To record the vacation pay accrued for January)   

Table (1)

  • Vacation pay expense is an expense and it decreases the equity value

b.

To determine

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

Chapter 11 Solutions

Financial Accounting
Show all chapter solutions
add
Ch. 11 - Proceeds from notes payable On May 15, Maynard Co....Ch. 11 - Proceeds from notes payable On January 26, Nyree...Ch. 11 - Federal income tax withholding Tam Worldlys weekly...Ch. 11 - Federal income tax withholding Marsha Mellows...Ch. 11 - Employee net pay Tam Worldlys weekly gross...Ch. 11 - Employee net pay Marsha Mellows weekly gross...Ch. 11 - Journalize period payroll The payroll register of...Ch. 11 - Journalize period payroll The payroll register of...Ch. 11 - Journalize payroll tax The payroll register of...Ch. 11 - Journalize payroll tax The payroll register of...Ch. 11 - Vacation pay and pension benefits Fukushima...Ch. 11 - Vacation pay and pension benefits Regling Company...Ch. 11 - Estimated warranty liability EarlKeen Co. sold...Ch. 11 - Estimated warranty liability Quantas Industries...Ch. 11 - Quick ratio Nabors Company reported the following...Ch. 11 - Quick ratio Adieu Company reported the following...Ch. 11 - Current liabilities Bon Nebo Co. sold 25,000...Ch. 11 - Entries for notes payable Cosimo Enterprises...Ch. 11 - Entries for discounting notes payable Ramsey...Ch. 11 - Evaluating alternative notes A borrower has two...Ch. 11 - Entries for notes payable A business issued a...Ch. 11 - Entries for discounted note payable A business...Ch. 11 - Entries for notes payable Bull City Industries is...Ch. 11 - Current portion of long-term debt PepsiCo, Inc.,...Ch. 11 - Calculate payroll An employee earns 25 per hour...Ch. 11 - Calculate payroll Breakin Away Company has three...Ch. 11 - Summary payroll data In the following summary of...Ch. 11 - Payroll tax entries According to a summary of the...Ch. 11 - Payroll entries The payroll register for Gamble...Ch. 11 - Payroll entries Urban Window Company had gross...Ch. 11 - Payroll internal control procedures Big Howies Hot...Ch. 11 - Internal control procedures Daves Scooters is a...Ch. 11 - Accrued vacation pay A business provides its...Ch. 11 - Pension plan entries Yuri Co. operates a chain of...Ch. 11 - Defined benefit pension plan terms In a recent...Ch. 11 - Accrued product warranty Parker Manufacturing Co....Ch. 11 - Accrued product warranty General Motors...Ch. 11 - Contingent liabilities Several months ago, Ayers...Ch. 11 - Quick ratio Gmeiner Co. had the following current...Ch. 11 - Quick ratio The current assets and current...Ch. 11 - Liability transactions The following items were...Ch. 11 - Entries for payroll and payroll taxes The...Ch. 11 - Wage and tax statement data on employer FICA tax...Ch. 11 - Payroll register The following data for Throwback...Ch. 11 - Payroll accounts and year-end entries The...Ch. 11 - Liability transactions The following items were...Ch. 11 - Entries for payroll and payroll taxes The...Ch. 11 - Wage and tax statement data and employer FICA tax...Ch. 11 - Payroll register The following data for Flexco...Ch. 11 - Payroll accounts and year-end entries The...Ch. 11 - Selected transactions completed by Kornett Company...Ch. 11 - Ethics in Action Tonya Latirno is a staff...Ch. 11 - Ethics in Action Marvin Turner was discussing...Ch. 11 - Communication WBM Motorworks is a manufacturer of...Ch. 11 - Recognizing pension expense The annual examination...Ch. 11 - Contingent liabilities Reynolds American, Inc.,...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions add
What is meant by catering theory, and how might it impact a firm's dividend policy?

Fundamentals of Financial Management (MindTap Course List)

What does the invisible hand of the marketplace do?

Principles of Microeconomics (MindTap Course List)

EXPECTED RETURNS Suppose you won the lottery and had two options: (1) receiving 0.5 million or (2) taking a gam...

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