Exercise 13-4 Vaughn Company began operations on January 2, 2016. It employs 12

Question

Exercise 13-4 Vaughn Company began operations on January 2, 2016. It employs 12 individuals who work 8-hour days and are paid hourly. Each employee earns 13 paid vacation days and 8 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 2016 2017 Vacation Days Used by Each Employee 2017 Sick Days Used by Each Employee 2016 2016 2017 $13 $14 0 12 7 Vaughn 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 Projected Future Pay Rates Time Was Earned 2016 2017 Used to Accrue Vacation Pay $13.98 15.08

Explanation / Answer

2017 Salaries and Wage expenses                       17,472         Salaries and Wage payables                        17,472 employees per hour hours per day Days Total                                 12                          14                                  8                                13         17,472 Salaries and Wage expenses                         9,408         Cash                          9,408

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