Exercise 13-4 Actual Hourly Wage Rate Vacation Days Used by Each Employee Sick D
ID: 2540477 • Letter: E
Question
Exercise 13-4
Actual Hourly
Wage Rate
Vacation Days Used
by Each Employee
Sick Days Used
by Each Employee
2016
2017
2016
2017
2016
2017
Year in Which Vacation
Time Was Earned
Projected Future Pay Rates
Used to Accrue Vacation Pay
Prepare journal entries to record transactions related to compensated absences during 2016 and 2017. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,125.)
Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2016 and 2017. (Round answers to 0 decimal places, e.g. 5,125.)
Exercise 13-4
Monty Company began operations on January 2, 2016. It employs 10 individuals who work 8-hour days and are paid hourly. Each employee earns 11 paid vacation days and 6 paid sick days annually. Vacation days may be taken after January 15 of the year following the year in which they are earned. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional information is as follows.Actual Hourly
Wage Rate
Vacation Days Used
by Each Employee
Sick Days Used
by Each Employee
2016
2017
2016
2017
2016
2017
$11 $12 0 10 4 5Monty Company has chosen not to accrue paid sick leave until used, and has chosen to accrue vacation time at expected future rates of pay without discounting. The company used the following projected rates to accrue vacation time.
Year in Which Vacation
Time Was Earned
Projected Future Pay Rates
Used to Accrue Vacation Pay
Prepare journal entries to record transactions related to compensated absences during 2016 and 2017. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,125.)
Date Account Titles and Explination Debit Credit 2016 (To accure the expense and liability for vacations) (To record sick leave paid) (To record vacation time paid) 2017 (To accrue the expense and liability for vacations) (To record sick leave paid) (To record vacation time paid)Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2016 and 2017. (Round answers to 0 decimal places, e.g. 5,125.)
2016 2017 Accrued Liability $ $Explanation / Answer
(a)
2016
To accrue the expense and liability for vacations
Salaries and Wages Expense............
10,216.80
(1)
Salaries and Wages Payable....
10,216.80
To record sick leave paid
Salaries and Wages Expense............
3,520
(2)
Cash...............................................
3,520
To record vacation time paid
No entry, since no vacation days were used.
2017
To accrue the expense and liability for vacations
Salaries and Wages Expense............
11,026.40
(3)
Salaries and Wages Payable....
11,026.40
To record sick leave paid
Salaries and Wages Expense............
4,800
(4)
Cash...............................................
4,800
To record vacation time paid
Salaries and Wage Expense..............
312
Salaries and Wages Payable..............
9,288
(5)
Cash...............................................
9,600
(6)
(1) 10 employees X $11.61/hr. X 8 hrs./day X 11 days = $10,216.80
(2) 10 employees X $11.00/hr. X 8 hrs./day X 4 days = $3,520
(3) 10 employees X $12.53/hr. X 8 hrs./day X 11 days = $11,026.40
(4) 10 employees X $12.00/hr. X 8 hrs./day X 5 days = $4,800
(5) 10 employees X $11.61/hr. X 8 hrs./day X 10 days = $9,288
(6) 10 employees X $12.00/hr. X 8 hrs./day X 10 days = $9,600
(b)
Accrued liability at year-end:
2016
2017
Jan. 1 balance
$ 0
$10,216.80
+ accrued
10,216.80
11,026.40
– paid
( 0)
(9,288)
Dec. 31 balance
$10,216.80
(1)
$11,955.20
(2)
(1)
10 employees X $11.61/hr. X 8 hrs./day X 11 days =
$10,216.80
(2)
10 employees X $11.61/hr. X 8 hrs./day X 1 day =
$ 928.80
10 employees X $12.53/hr. X 8 hrs./day X 11 days =
11,026.40
$11,955.20
(a)
2016
To accrue the expense and liability for vacations
Salaries and Wages Expense............
10,216.80
(1)
Salaries and Wages Payable....
10,216.80
To record sick leave paid
Salaries and Wages Expense............
3,520
(2)
Cash...............................................
3,520
To record vacation time paid
No entry, since no vacation days were used.
2017
To accrue the expense and liability for vacations
Salaries and Wages Expense............
11,026.40
(3)
Salaries and Wages Payable....
11,026.40
To record sick leave paid
Salaries and Wages Expense............
4,800
(4)
Cash...............................................
4,800
To record vacation time paid
Salaries and Wage Expense..............
312
Salaries and Wages Payable..............
9,288
(5)
Cash...............................................
9,600
(6)
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.