rks Window Help ?\" Sat 1 esource hom Cengage Learning nt: Chapter 10 Assignment

Question

rks Window Help ?" Sat 1 esource hom Cengage Learning nt: Chapter 10 Assignment Asignm Score: 37.77% Save ExitSubmit Assignment for Grading Check My Werek Exercise 10-6 Vacation Pay Liability Funz Corporation gives three weeks' paid vecation to each employe who has worked at the company for one year Bosed en studes of emplayee turnover and previous o experience, management estimates that 65 percent of the employees will quality for vacation pay this year O 1. Assume that Funr's July payrollis $300,000, of which $20,000 is peid to employes on vacation, Pigure the estimatied employee vecation benefit: for the month, Round all intermediate calculations to three decimal places. Assume there are 52 weeks in a year o 11250 Hide Feedback Hint(s 2. Prepare a journal entry to record the emplayee benefit for Juy 6

Explanation / Answer

a)The computation of vacation pay expenses based on the payroll of employees not on vacation so ($300000-$20,000) is as follows 280,000 x 7.14% x 65% i.e. $12995 Working Note:- 280000-----------100% 20,000------------------? % 20,000 divided by 280,000 multiply by 100% , it will come 7.14% b) Date Account Title Debit Credit Vacation pay Expense $12,995 Estimated liability for vacation pay expense $12,995 To Record Estimated vacation pay expense c) Date Account Title Debit Credit Estimated liability for vacation pay expense $20,000 Cash $20,000 To Record Wages of employee on vacation

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