Wisconsin Company began business on January 2, 2019 with 5 employees. It created a sick leave and vacation policy stated as follows:Each employee is allowed 8 days of paid sick leave each year and 1 day of paid vacation leave for each month worked. The accrued vacation leave cannot be taken until the employee has been with the company 1 year. The sick leave, if not used accumulates to a 18-day maximum.The vacation leave accumulates for 5 years, but at any time the employee may request additional compensation in lieu of taking paid vacation leave.The company considers that the requirements of PAS have been met and desires to record the liability for both compensated absences on a quarterly basis. The daily gross wages for each employee are P250.What is the amount to be recorded as Liability for Compensated absences-Vacation leave for the first quarter of 2019.

The corporations which are liable to pay for employee's time off for vacation and sick leave…

Answered: Wisconsin Company began business 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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Wisconsin Company began business on January 2, 2019 with 5 employees. It created a sick leave and vacation policy stated as follows:

Each employee is allowed 8 days of paid sick leave each year and 1 day of paid vacation leave for each month worked.
The accrued vacation leave cannot be taken until the employee has been with the company 1 year.
The sick leave, if not used accumulates to a 18-day maximum.
The vacation leave accumulates for 5 years, but at any time the employee may request additional compensation in lieu of taking paid vacation leave.

The company considers that the requirements of PAS have been met and desires to record the liability for both compensated absences on a quarterly basis. The daily gross wages for each employee are P250.

What is the amount to be recorded as Liability for Compensated absences-Vacation leave for the first quarter of 2019.

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