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?
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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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?
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