4.On January 1, 2019, Baker Co. decided to grant its employees 10 vacation days and five sick dayseach year. Vacation days earned can be carried over to the next year but not sick days. Eachemployee took an average of three sick days in 2019. During 2019, each of Baker's sixemployees earned P100 per day and earned 10 vacation days. These vacation days were takenduring 2020. What amount should Baker report for compensated absence expense for the yearended December 31, 2019?a. 0b. 6,000c. 7,800d. 9,0005. North Corp. has an employee benefit plan for compensated absences that gives employees 10paid vacation days and 10 paid sick days. Both vacation and sick days can be carried overindefinitely. Employees can elect to receive payment in lieu of vacation days; however, nopayment is given for sick days not taken. At December 31, 2019, North's unadjusted balance ofliability for compensated absences was P21,000. North estimated that there were 150 vacationdays and 75 sick days available at December 31, 2019. North's employees earn an average ofP100per day. In its December 31, 2019, balance sheet, what amount of liability for compensatedabsences is North required to report?а. 36,000b. 22,500с. 21,000d. 15,0006. Northwest Company determined tha5t it has an obligation relating to employees' rights toreceive compensation for future absences attributable to employees' services already rendered.The obligation relates to rights that vest, and payment of the compensation is probable. Theamounts of Northwest's obligations as of December 31 are reasonably estimated as follows:Vacation payP110,000Sick pay80,000In its December 31 balance sheet, what amount should Northwest report as its liability forcompensated absences?а.b. 80,000с. 110,000d. 190,000

Compensated Absence Expense = Unused vacation days x Wage per day

Answered: On January 1, 2019, Baker Co. decided…

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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