Wise Company began operations on January 2, 2019. It employs 9 individuals who work 8-hour days and are paid hourly. Each employee earns 11 paid vacation days and 8 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 2019 2020 2019 2020 2019 2020 $ 11 $ 12 0 10 6 7 Wise Company has chosen to accrue the cost of compensated absences at rates of pay in effect during the period when earned and to accrue sick pay when earned. Part A: Prepare journal entries to record transactions related to compensated absences during 2019 and 2020. 2019 (to accrue the exp & liability for vacation) (to accrue the exp & liability for sick pay) (to record pymt for compensated time when used by employees) 2020
Wise Company began operations on January 2, 2019. It employs 9 individuals who work 8-hour days and are paid hourly. Each employee earns 11 paid vacation days and 8 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 |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2019
|
2020
|
2019
|
2020
|
2019
|
2020
|
|||||||
| $ 11 | $ 12 | 0 | 10 | 6 | 7 |
Wise Company has chosen to accrue the cost of compensated absences at rates of pay in effect during the period when earned and to accrue sick pay when earned.
Part A: Prepare
2019
(to accrue the exp & liability for vacation)
(to accrue the exp & liability for sick pay)
(to record pymt for compensated time when used by employees)
2020
(to accrue the exp & liability for vacation)
(to accrue the exp & liability for sick pay)
(to record vacation time paid)
(to record sick leave paid)
PART B Compute the amounts of any liability for compensated absences that should be reported on the balance sheet in Dec.
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