Entity A has 20 employees who are each entitled to one day paid vacation leave for each month of service rendered. Unused vacation leaves cannot be carried forward and are forfeited when employees leave the entity. All the employees have rendered service throughout the current year and have taken a total of 150 days of vacation leaves. The average daily rate of the employees in the current period is ₱1,000. However, a 5% increase in the rate is expected to take into effect in the following year. Based on Entity A’s past experience, the average annual employee turnover rate is 20%. How much will Entity A accrue at the end of the current year for unused entitlements? * A. 150,000 B. 90,000 C. 0 D. 94,500
Entity A has 20 employees who are each entitled to one day paid vacation leave for each month of service rendered. Unused vacation leaves cannot be carried forward and are forfeited when employees leave the entity. All the employees have rendered service throughout the current year and have taken a total of 150 days of vacation leaves. The average daily rate of the employees in the current period is ₱1,000. However, a 5% increase in the rate is expected to take into effect in the following year. Based on Entity A’s past experience, the average annual employee turnover rate is 20%. How much will Entity A accrue at the end of the current year for unused entitlements? * A. 150,000 B. 90,000 C. 0 D. 94,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Entity A has 20 employees who are each entitled to one day paid vacation leave for each month of service rendered. Unused vacation leaves cannot be carried forward and are forfeited when employees leave the entity. All the employees have rendered service throughout the current year and have taken a total of 150 days of vacation leaves. The average daily rate of the employees in the current period is ₱1,000. However, a 5% increase in the rate is expected to take into effect in the following year. Based on Entity A’s past experience, the average annual employee turnover rate is 20%. How much will Entity A accrue at the end of the current year for unused entitlements? *
A. 150,000
B. 90,000
C. 0
D. 94,500
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