Carla Company began operations on January 2, 2025. It employs 11 individuals who work 8-hour days and are paid hourly. Each employee earns 9 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 Vacation Days Used Wage Rate by Each Employee Sick Days Used by Each Employee 2025 2026 2025 2026 2025 2026 $10 $11 0 8 5 Carla 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. (a) Your answer is partially correct. 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 manually. List all debit entries before credit entries.) Date Account Titles and Explanation 2025 Salaries and Wages Expense Salaries and Wages Payable Debit 7920 Credit 7920

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Carla Company began operations on January 2, 2025. It employs 11 individuals who work 8-hour days and are paid hourly. Each
employee earns 9 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
Vacation Days Used
Wage Rate
by Each Employee
Sick Days Used
by Each Employee
2025
2026
2025
2026
2025
2026
$10
$11
0
8
4
5
Carla 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.
(a)
Your answer is partially correct.
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 manually. List all debit entries before credit entries.)
Date Account Titles and Explanation
2025
Salaries and Wages Expense
Salaries and Wages Payable
(To accrue the expense and liability for vacations)
Salaries and Wages Expense
Salaries and Wages Payable
(To accrue the expense and liability for sick pay)
Salaries and Wages Expense
Cash
(To record payment for compensated time when used
by employees)
2026
Salaries and Wages Expense
Salaries and Wages Payable
(To accrue the expense and liability for vacations)
Salaries and Wages Expense
Salaries and Wages Payable
(To accrue the expense and liability for sick pay)
Salaries and Wages Expense
Salaries and Wages Payable
Cash
(To record vacation time paid)
Salaries and Wages Expense
Salaries and Wages Payable
Cash
Debit
7920
5280
3168
4752
7920
Credit
7920
5280
3168
4752
7920
Transcribed Image Text:Carla Company began operations on January 2, 2025. It employs 11 individuals who work 8-hour days and are paid hourly. Each employee earns 9 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 Vacation Days Used Wage Rate by Each Employee Sick Days Used by Each Employee 2025 2026 2025 2026 2025 2026 $10 $11 0 8 4 5 Carla 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. (a) Your answer is partially correct. 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 manually. List all debit entries before credit entries.) Date Account Titles and Explanation 2025 Salaries and Wages Expense Salaries and Wages Payable (To accrue the expense and liability for vacations) Salaries and Wages Expense Salaries and Wages Payable (To accrue the expense and liability for sick pay) Salaries and Wages Expense Cash (To record payment for compensated time when used by employees) 2026 Salaries and Wages Expense Salaries and Wages Payable (To accrue the expense and liability for vacations) Salaries and Wages Expense Salaries and Wages Payable (To accrue the expense and liability for sick pay) Salaries and Wages Expense Salaries and Wages Payable Cash (To record vacation time paid) Salaries and Wages Expense Salaries and Wages Payable Cash Debit 7920 5280 3168 4752 7920 Credit 7920 5280 3168 4752 7920
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