Exercise 2 Azalde Company began operations on January 1, 2017. It employs 9 indi

Question

Exercise 2 Azalde Company began operations on January 1, 2017. It employs 9 individuals who work 8-hour days and are paid hourly. Each employee earns 10 paid vacation days and 6 paid sick days annually. Employees may take vacation soon as earned; unused sick days accrue. days after January 15 of the year following the year earned. Employees may take sick days as Additional information is as follows: Vacation Days Used by Each Employee Sick Days Used by Each Employee Actual Hourly Wage Rate 201Z 2018 $15 $18 2017 2018 2017 2018 0 4 Azalde Company has chosen to accrue the cost of compensated absences at rates of pay in effect during the period when earned and to accrue sick pay when earned. Instructions Prepare journal entries to record transactions related to compensated absences during 2017 & 2018 (a)

Explanation / Answer

Journal entries for 2017

Journal entries for 2018

Date account titles and explanation debit credit 2017 Salaries and wages expense (9 individuals *8hours*10 vacation days *15 actual hourly wage rate ) 10800 Salaries and wages payable 10800 (to accrue expenses and liability for vacations) 2017 Salaries and wages expense (9 individuals *8 hours * 15 actual hourly wage rate *6 paid sick days) 6840 Salaries and wages payable 6840 (to accrue expenses and liability for sick pay) 2017 Salaries and wages payable (9 individuals * 8 hours *15 actual hourly wage rate * 4 days sick leave taken) 4320 Cash 4320 (to record sick leave paid)

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