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.

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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

RIZAL CORP. grants its employees 10 days of paid vacation leave per year. Per company's policies, employees are required to take vacation leave each year but not necessarily to take the whole vacation leave credits each year. Vacation leaves not taken during a year can be carried over indefinitely. RIZAL CORP. has 400 employees with an average salary of P800 per day. There is an average increase in salary of 5% every year. During 2018, total leave vacation taken by employees were 3,200 days. Based on past experience, 80% of unused vacation leave for a year are taken immediately next year. If the unused vacation leaves do not vest, what amount should be reported as vacation pay expense in 2018? 3,097,600 3,232,000 3,200,000 2,560,000 O
Under vacatlon leave cannot be carrled over next year (non-accumulating), What amount should be reported as vacation pay expense In 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
Fleetwood Ltd commenced operations on 1 July 2020 and had 420 employees. Average salaries were $70,000 per annum for the year. Fleetwood Ltd accounts for all recognised employee costs as expenses. Employees are entitled to 13 weeks of long service leave after 10 years of employment. The following information is based on advice received from actuarial consultants at 30 June 2021. Number of years unit credit Number of years until long service leave is expected to be paid 1 year Руears Probability that long service leave will be taken 30% Expected increase in salaries (based on inflation) 1.5% Yield on 9-year high quality corporate bonds at 30/06/2021 10% Projected $1 salary over 9 years at 1.5% inflation rate 1.1434 Present value of $1 lump sum in 9 years at 10% 0.4241 Required Determine the obligation for long service leave at 30 June 2021, applying the projected unit credit method in accordance with AASB 119/IAS 19, and prepare the journal entry to account for changes in the provision…
Paston Ltd started operating on 1 July 2017 with 12 employees. Three years later all of those employees were still with the company. On 1 July 2019 the company hired 15 more people but by 30 June 2020 only 10 of those employed at the beginning of that year were still employed by Asia Pacific Ltd. All employees are entitled to 13 weeks’ long-service leave after a conditional period of 10 years of employment with Paston Ltd. At 30 June 2020 Paston Ltd estimates the following: The aggregate annual salaries of all employees hired on 1 July 2017 is now $1,200,000. The aggregate annual salaries of all current employees hired on 1 July 2019 is now $800,000. The probability that employees hired on 1 July 2017 will continue to be employed for the duration of the conditional period is 40 per cent. The probability that employees hired on 1 July 2019 will continue to be employed for the duration of the conditional period is 20 per cent. Salaries are expected to increase indefinitely at 1…
Prepare journal entries to record the following transaction: Ulta Inc. allows each employee to earn 15 paid vacation days each year with full pay. Unused vacation time can be carried over to the next year. By the end of 2020, three employees carried over to 2021 a total of 20 vacation days, which is represented 2020 salary of $6,000
On August 31, 2016, ABC Co offered an early retirement package to employees who have rendered at least 20 years of service to the company. The termination package consisted of the following: Lump-sum payment based on December 31 2016 monthly salary level times the number of years in service. Periodic future annual payments based on 50% of December 31, 2016, monthly salary level to be received every December 31 starting on December 31, 2018, and end in the year prior to the commencement of the regular pension, which is on the 30th year from the employment of the employee. A complimentary watch with an estimated fair value of 85,000 as of August 31, 2016, subject to availability of its cash equivalent, will be given to employees with at least 25 years of service in the company. Medical benefits package costing currently at 15,000 and expected to increase by 10% every year. The medical coverage will end on the 30th year from the employment of the employee, which is the commencement of…
On January 1, 2019, FrankKeating Company decided to grant its employees 10 vacation days and five sick days each year. Vacation days are earned can be carried over to the next year but not sick days. Each employee took an average of four sick days in 2019. During the year, each of Mike’s sixty employees earned P300 per day (increases by 5% each year) and had three unused vacation pays as of yearend. How much is the Vacation Pay Expense? How much is the Sick Pay Expense? How much is the Liability for Compensated Absences?
On January 1, 2021, Panda Corporation agreed to grant all its employees two weeks paid vacation each year, with the stipulation that vacations earned each year can be taken the following year. For the year ended December 31, 2021, Panda's employees each earned an average of $500 per week. A total of 1,000 vacation weeks were earned in 2021, with 400 vacation weeks earned in 2021 but not taken during 2021. In its December 31, 2021, balance sheet, what amount of liability for compensated absences is Panda required to report? $500,000. $200,000. $0. $300,000.
Pronghorn Company began operations on January 2, 2025. It employs 12 individuals who work 8-hour days and are paid hourly. Each employee earns 10 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 Sick Days Used by Each Employee Vacation Days Used Wage Rate by Each Employee 2025 2026 2025 2026 2025 2026 $6 $7 0 9 5 Pronghorn 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. Prepare journal entries to record transactions related to compensated absences during 2025 and 2026. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent…
The employees of XYZ Ltd are entitled to 10 weeks’ long-service leave (LSL) after 10 years of continuous service with the company. The pre-conditional period is 5 years. The following information has been compiled for calculating the liability for long service leave as at 30 June 2021. Number of employees as at 30 June 2021 Aggregate projected salary when LSL vests Aggregate annual salaries for 2020-2021 Years of service as at 30 June 2021 The expected Government bond rate at the time when LSL vests Probability that LSL will vest 22 $950,000 $560,000 4 7% 24% 28 $350,000 $250,000 6 4% 73% 24 $190,000 $180,000 9 3% 100% The total long service leave provision reported in the balance sheet as at 30 June 2020 was $59,982. Assume that no LSL was taken during the year. Required: Based on the information provided above calculate the LSL Entitlement that needs to be booked as at 30 June 2021.