On January 1, 2021, Poplar Fabricators Corporation agreed to grant its employees two weeks of vacation each year, with the stipulation that vacations earned each year can be taken the following year. For the year ended December 31, 2021, Poplar Fabricators employees each earned an average of $950 per week. Eight hundred vacation weeks earned In 2021 were not taken during 2021. Required: 1. Prepare the appropriate adjusting entry for vacations earned but not taken in 2021. 2. Suppose that, by the time vacations actually are taken in 2022, salary rates for employees have risen by an average of 4 percent from their 2021 level. Assume all vacation days earned In 2021 are taken in 2022. Also, assume salaries paid In 2022 (not including amounts paid for 2021 vacation days used in 2022) totaled $30 million. Prepare a journal entry that summarizes 2022 salaries and the payment for 2021 vacations taken in 2022. (Note: Do not Include in the journal entry any amounts for vacation days earned in 2022). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the appropriate adjusting entry for vacations earned but not taken in 2021. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.)
On January 1, 2021, Poplar Fabricators Corporation agreed to grant its employees two weeks of vacation each year, with the stipulation that vacations earned each year can be taken the following year. For the year ended December 31, 2021, Poplar Fabricators employees each earned an average of $950 per week. Eight hundred vacation weeks earned In 2021 were not taken during 2021. Required: 1. Prepare the appropriate adjusting entry for vacations earned but not taken in 2021. 2. Suppose that, by the time vacations actually are taken in 2022, salary rates for employees have risen by an average of 4 percent from their 2021 level. Assume all vacation days earned In 2021 are taken in 2022. Also, assume salaries paid In 2022 (not including amounts paid for 2021 vacation days used in 2022) totaled $30 million. Prepare a journal entry that summarizes 2022 salaries and the payment for 2021 vacations taken in 2022. (Note: Do not Include in the journal entry any amounts for vacation days earned in 2022). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the appropriate adjusting entry for vacations earned but not taken in 2021. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 6MC
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Transcribed Image Text:On January 1, 2021, Poplar Fabricators Corporation agreed to grant its employees two weeks of vacation each year, with the stipulation
that vacations earned each year can be taken the following year. For the year ended December 31, 2021, Poplar Fabricators'
employees each earned an average of $950 per week. Eight hundred vacation weeks earned in 2021 were not taken during 2021.
Required:
1. Prepare the appropriate adjusting entry for vacations earned but not taken in 2021.
2. Suppose that, by the time vacations actually are taken in 2022, salary rates for employees have risen by an average of 4 percent
from their 2021 level. Assume all vacation days earned In 2021 are taken in 2022. Also, assume salarles paid in 2022 (not including
amounts paid for 2021 vacation days used in 2022) totaled $30 million. Prepare a journal entry that summarizes 2022 salaries and the
payment for 2021 vacations taken in 2022. (Note: Do not include in the Journal entry any amounts for vacation days earned in 2022).
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Prepare the appropriate adjusting entry for vacations earned but not taken in 2021. (If no entry is required for a transaction/event,
select "No journal entry required in the first account field.)
View transaction list
Journal entry worksheet
Record the adjusting entry for vacations earned but not taken in 2021.
Note: Enter debits before credits.
Event
1
General Journal
Debit
Credit
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