A company gives each of its 50 employees (assume they were all employed continuouslythrough 2020 and 2021) 12 days of vacation a year if they are employed at the end of theyear. The vacation accumulates and may be taken starting January 1 of the next year.The employees work 8 hours per day. In 2020, they made $17.50 per hour and in 2021they made $20 per hour. During 2021, they took an average of 9 days of vacation each.The company's policy is to record the liability existing at the end of each year at thewage rate for that year. What amount of vacation liability would be reflected on the2020 and 2021 balance sheets, respectively?Select one:a. $96,000; $120,000b. $96,000; $117,000O c. $84,000; $120,000O d. $84,000; $117,000

Vacation Liability is a provision which is created to write-off expenditure which arises because of…

Answered: A company gives each of its 50…

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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Jayne Company presently pays its employees at the end of each week. The weekly payroll totals $500,000. If Jayne Company were to extend the pay period so as to pay its employees 1 week later throughout an entire year, the employees would in effect be "lending" the firm how much for the year? And if Jayne company gets a discount loan at a 12 percent interest rate. They borrow $100,000 for one year. What is the effective interest rate?
Under the assumptlon: Unused vacation leaves vest (accumulating and vesting), What Is the balance of llablity for compensated absences for the year ended December 31, 20207 ABC Corp allows each employee to earn 15 days of paid vacation leave per year. Unused vacation leave can be carried up to two years from the year there were earned, thereafler it shall expire. The company has 50 employees (assumed have been employed throughout 2019 and 2020) with an average salary ofP900 per day. Salary rates increased by 10% in 2020. According to past experience, 75% of allowed leaves to be carried-forward are ultimately exercised by the employees. Total leave vacation taken by employces during 2019 and 2020 were 400 days and 480 days, respectively. Your answer
A company gives each of its 75 employees (assume they were all employed continuously through 2017 and 2018) 12 days of vacation a year if they are employed at the end of the year. The vacation accumulates and may be taken starting January 1 of the next year. The employees work 8 hours per day. In 2017, they made $24.50 per hour and in 2018 they made $28 per hour. During 2018, they took an average of 9 days of vacation each. The company's policy is to record the liability existing at the end of each year at the wage rate for that year. What amount of vacation liability would be reflected on the 2017 and 2018 balance sheets, respectively? A. $201,600; $245,700 B. $201,600; $252,000 C. $176,400; $252,000 D. $176,400; $245,700
Aron and Nora Company grant all employees 2 weeks paid vacation for each full year of employment. Unused vacation time can be accumulated and carried forward to succeeding years and paid when vacations are taken or upon termination of employment. No employees resigned during the year.The following information is also available: Liability for accumulated vacations on January 1, 2020: 400,000 Pre-2020 accrued vacations used during January 1 – September 30, 2020 250,000 Vacations earned during 2019 based on current rate 300,000 The entity granted a 10% salary increase to all employees on October 1, 2020. What amount should be reported as vacation pay expense for the year ended December 31, 2020?
Ivanhoe Company has 60 employees who work 8-hour days and are paid hourly. On January 1, 2025, the company began a program of granting its employees 10 days of paid vacation each year. Vacation days earned in 2025 may first be taken on January 1, 2026. Information relative to these employees is as follows: Hourly Year Wages Vacation Days Earned by Each Employee Vacation Days Used by Each Employee 2025 $27.50 10 0 2026 29.50 10 8 2027 32.50 10 10 Ivanhoe has chosen to accrue the liability for compensated absences at the current rates of pay in effect when the compensated time is earned. What is the amount of the accrued liability for compensated absences that should be reported at December 31, 2027?
Crane Inc. has an annual unlimited vacation policy for its employees and the eligibility requirement is to be an employee of the company. Crane has 40 employees with average annual salaries of $50400. Crane expects its employees to take vacation evenly during the year. In the previous year, its employees took on average 4 weeks of vacation. How much vacation liability should be on the balance sheet at June 30, 2025? O $168000 O $336000 O $0 O $84000
Beginning 2019, Maigo and Maika Company grant 15 days of vacation a year to each of the 100 employees if they are still employed at the end of the year. The vacation accumulates and may be taken starting January 1 of the following year. The employees work 8 hours a day. The rate for all employees during 2019, 2020, and 2021 are P70, P75 and P80 per hour, respectively. During 2020 and 2021, the employees each used an average of 5 and 8 vacation days, respectively. The entity’s policy is to record the liability existing at the end of each year at the wage rate for the current year. 1. What amount should be reported as vacation liability on December 31, 2019, 2020 and 2021?2. What amount should be reported as vacation pay expense on December 31, 2019, 2020, and 2021, respectively?
Under vacation leave cannot be carrled over next year (non-accumulating), What Is the balance of llability for compensated absences for the year ended December 31, 2019? * ABC Corp allows each employee to earn 15 days of paid vacation leave per year. Unused vacation leave can be carried up to two years from the year there were earned, thereafter it shall expire. The company has 50 employees (assumed have been employed throughout 2019 and 2020) with an average salary of P900 per day. Salary rates increased by 10% in 2020. According to past experience, 75% of allowed leaves to be carried-forward are ultimately exercised by the employees. Total leave vacation taken by employees during 2019 and 2020 were 400 days and 480 days, respectively. Your answer
Rexallo Company begins business on January 2, 2019, with 15 employees. Its company policy is to permit each employee to take 6 days of paid sick leave each year and 1½ days of paid vacation leave for each month worked. The sick leave, if not used, accumulates to a 24-day maximum. The vacation leave accumulates for 2 years, but at any time after a 1-year period, the employee may request additional compensation in lieu of taking paid vacation leave. Rexallo prefers to record the liability for compensated absences on a quarterly basis. Assume that the gross salaries for each employee are $100 per day. The following selected events take place during the first two quarters of 2019: • On March 31, 2019, the quarterly liability for compensated absences is to be recorded. • On April 30, 2019, the following $45,000 monthly payroll, including paid vacation and sick leave, is summarized from Rexallo’s records: Payroll for Time Worked Vacation Taken Sick Leave…
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Bellward Company grants vacation time of two weeks to those employees who have worked for the company one complete year. After 10 years of service, employees receive four weeks of vacation. The monthly payroll for January totals $320,000, of which 70% is payable to employees with 10 or more years of service. On January 31, record the January expense arising from the vacation policy of the company. (Round the final answers to the nearest whole dollar.) No 1 Date Jan 31 Benefits expense General Journal Estimated vacation payable Debit 96,000 X Credit 96,000 X
2

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