Sheffield Company began operations on January 2, 2019. It employs 10 individuals who work 8-hour days and are paid hourly. Each employee earns 10 paid vacation days and 8 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 HourlyWage Rate Vacation Days Usedby Each Employee Sick Days Usedby Each Employee2019 2020 2019 2020 2019 2020$6 $7 0 9 6 7Sheffield 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) Correct answer iconYour answer is correctPrepare journal entries to record transactions related to compensated absences during 2019 and 2020. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)DateAccount Titles and ExplanationDebitCredit2019Salaries and wages expense4800 Salaries and wages payable 4800 (To accrue the expense and liability for vacations) Salaries and wages expense3840 Salaries and wages payable 3840 (To accrue the expense and liability for sick pay) Salaries and Wages Payable2880 Cash 2880 (To record payment for compensated time when used by employees) 2020Salaries and wages expense5600 Salaries and Wages Payable 5600 (To accrue the expense and liability for vacations) Salaries and Wages expense4480 Salaries and wages payable 4480 (To accrue the expense and liability for sick pay) Salaries and wages expense720 Salaries and wages payable4320 Cash 5040 (To record vacation time paid) Salaries and wages expense160 Salaries and wages payable3760 Cash 3920 (To record sick leave paid) QUESTION: Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2019 and 2020. 2019 2020Vacation Wages Payable $enter a dollar amount $enter a dollar amountSick Pay Wages Payable $enter a dollar amount $enter a dollar amount

Journal entry A journal entry is a record of the business transactions within the accounting books…

Answered: effield Company began operations on…

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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Actual Hourly Wage Rate	Vacation Days Used by Each Employee		Sick Days Used by Each Employee
2019	2020		2019	2020	2019	2020
$6		$7		0	9	6	7

(a)

Correct answer icon

Your answer is correct

Prepare journal entries to record transactions related to compensated absences during 2019 and 2020. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
2019	Salaries and wages expense	4800
	Salaries and wages payable		4800
	(To accrue the expense and liability for vacations)
	Salaries and wages expense	3840
	Salaries and wages payable		3840
	(To accrue the expense and liability for sick pay)
	Salaries and Wages Payable	2880
	Cash		2880
	(To record payment for compensated time when used by employees)
2020	Salaries and wages expense	5600
	Salaries and Wages Payable		5600
	(To accrue the expense and liability for vacations)
	Salaries and Wages expense	4480
	Salaries and wages payable		4480
	(To accrue the expense and liability for sick pay)
	Salaries and wages expense	720
	Salaries and wages payable	4320
	Cash		5040
	(To record vacation time paid)
	Salaries and wages expense	160
	Salaries and wages payable	3760
	Cash		3920
	(To record sick leave paid)

QUESTION: Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2019 and 2020.

	2019	2020
Vacation Wages Payable	$enter a dollar amount	$enter a dollar amount
Sick Pay Wages Payable	$enter a dollar amount	$enter a dollar amount

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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