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1. M Gavin Co. grants all employees two weeks of paid vacation for each full year of employment. Unused vacation time can be accumulated and carried forward to succeeding years and will be paid at the salaries in effect when vacations are taken or when employment is terminated. There was no employee turnover in 2019. Additional information relating to the year ended December 31, 2019, is as follows: Liability for accumulated vacations at 12/31/18 Pre-2019 accrued vacations taken from 1/1/19 to 9/30/19 (the authorized period for vacations) P35,000 20,000 Vacations earned for work in 2019 (adjusted to current rates) 30,000 Gavin granted a 10% salary increase to all employees on October 1, 2019, its annual salary increase date. For the year ended December 31, 2019, Gavin should report vacation pay expense of а. 45,000 b. 35,500 с. 31,500 d. 30,000

1. M Gavin Co. grants all employees two weeks of paid vacation for each full year of employment. Unused vacation time can be accumulated and carried forward to succeeding years and will be paid at the salaries in effect when vacations are taken or when employment is terminated. There was no employee turnover in 2019. Additional information relating to the year ended December 31, 2019, is as follows: Liability for accumulated vacations at 12/31/18 Pre-2019 accrued vacations taken from 1/1/19 to 9/30/19 (the authorized period for vacations) P35,000 20,000 Vacations earned for work in 2019 (adjusted to current rates) 30,000 Gavin granted a 10% salary increase to all employees on October 1, 2019, its annual salary increase date. For the year ended December 31, 2019, Gavin should report vacation pay expense of а. 45,000 b. 35,500 с. 31,500 d. 30,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please put all of the necessary information and computations for better understanding. Thank you.

1. M Gavin Co. grants all employees two weeks of paid vacation for each full year of employment. Unused vacation time can be accumulated and carried forward to succeeding years and will be paid at the salaries in effect when vacations are taken or when employment is terminated. There was no employee turnover in 2019. Additional information relating to the year ended December 31, 2019, is as follows: Liability for accumulated vacations at 12/31/18 Pre-2019 accrued vacations taken from 1/1/19 to 9/30/19 (the authorized period for vacations) Vacations earned for work in 2019 (adjusted to current rates) P35,000 20,000 30,000 Gavin granted a 10% salary increase to all employees on October 1, 2019, its annual salary increase date. For the year ended December 31, 2019, Gavin should report vacation pay expense of a. 45,000 b. 35,500 с. 31,500 d. 30,000 2. The following information pertains to Rik Co.'s two employees: No. of weeks worked in 2019 Vacation rights vest or accumulate Name Weekly salary Ryan 800 52 Yes Todd 600 52 no Neither Ryan nor Todd took the usual two-week vacation in 2019. In Rik's December 31, 2019, financial statements, what amount of vacation expense and liability should be reported? а. 2,800 b. 1,600 с. 1,400 d. 0 3. Fay Corp. pays its outside salespersons fixed monthly salaries and commissions on net sales. Sales commission are computed and paid on a monthly basis (in the month following the month of sale), and the fixed salaries are treated as advances against commissions. However, if the fixed salaries for salespersons exceed their sales commissions earned for a month, such excess is not charged back to them. Pertinent data for the month of March 2019 for the three salespersons are as follows: Sales person Fixed salary Net sales Commission rate A 10,000 200,000 4% В 14,000 400,000 6% 18,000 600,000 6% Totals 42,000 1,200,000 What amount should Fay accrue for sales commission payable at March 31, 2019? a. 70,000 b. 68,000 с. 28,000 d. 26,000
Transcribed Image Text:1. M Gavin Co. grants all employees two weeks of paid vacation for each full year of employment. Unused vacation time can be accumulated and carried forward to succeeding years and will be paid at the salaries in effect when vacations are taken or when employment is terminated. There was no employee turnover in 2019. Additional information relating to the year ended December 31, 2019, is as follows: Liability for accumulated vacations at 12/31/18 Pre-2019 accrued vacations taken from 1/1/19 to 9/30/19 (the authorized period for vacations) Vacations earned for work in 2019 (adjusted to current rates) P35,000 20,000 30,000 Gavin granted a 10% salary increase to all employees on October 1, 2019, its annual salary increase date. For the year ended December 31, 2019, Gavin should report vacation pay expense of a. 45,000 b. 35,500 с. 31,500 d. 30,000 2. The following information pertains to Rik Co.'s two employees: No. of weeks worked in 2019 Vacation rights vest or accumulate Name Weekly salary Ryan 800 52 Yes Todd 600 52 no Neither Ryan nor Todd took the usual two-week vacation in 2019. In Rik's December 31, 2019, financial statements, what amount of vacation expense and liability should be reported? а. 2,800 b. 1,600 с. 1,400 d. 0 3. Fay Corp. pays its outside salespersons fixed monthly salaries and commissions on net sales. Sales commission are computed and paid on a monthly basis (in the month following the month of sale), and the fixed salaries are treated as advances against commissions. However, if the fixed salaries for salespersons exceed their sales commissions earned for a month, such excess is not charged back to them. Pertinent data for the month of March 2019 for the three salespersons are as follows: Sales person Fixed salary Net sales Commission rate A 10,000 200,000 4% В 14,000 400,000 6% 18,000 600,000 6% Totals 42,000 1,200,000 What amount should Fay accrue for sales commission payable at March 31, 2019? a. 70,000 b. 68,000 с. 28,000 d. 26,000
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