Pina Colada Limited began operations on January 2, 2022. Pina Colada employs 9 individuals who work eight-hour days and are paid hourly. Each employee earns 10 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 Wage Rate Vacation Days Used by Each Employee Sick Days Used by Each Employee 2022 2023 2022 2023 2022 2023 $20.00 $22.00 0 8 3 4 Assume that Pina Colada Limited has chosen not to recognize paid sick leave until it is used, and has chosen to accrue vacation time a expected future rates of pay without discounting. Pina Colada uses the following projected rates to accrue vacation time: Year in Which Vacation Time Was Earned 2022 2023 Projected Future Pay Rates Used to Accrue Vacation Pay $20.75 per hour $22.60 per hour Calculate the amounts of any liability for vacation pay and sick days that should be reported on the SFP at December 31, 2022 and 2023. (Do not leave any answer field blank. Enter O for amounts.) Liability for vacation pay $ Liability for sick pay $ 2022 14,940 $ $ 2023

Pina Colada Limited began operations on January 2, 2022. Pina Colada employs 9 individuals who work eight-hour days and are paid hourly. Each employee earns 10 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 Wage Rate Vacation Days Used by Each Employee Sick Days Used by Each Employee 2022 2023 2022 2023 2022 2023 $20.00 $22.00 0 8 3 4 Assume that Pina Colada Limited has chosen not to recognize paid sick leave until it is used, and has chosen to accrue vacation time a expected future rates of pay without discounting. Pina Colada uses the following projected rates to accrue vacation time: Year in Which Vacation Time Was Earned 2022 2023 Projected Future Pay Rates Used to Accrue Vacation Pay $20.75 per hour $22.60 per hour Calculate the amounts of any liability for vacation pay and sick days that should be reported on the SFP at December 31, 2022 and 2023. (Do not leave any answer field blank. Enter O for amounts.) Liability for vacation pay $ Liability for sick pay $ 2022 14,940 $ $ 2023

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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