Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 5MC
To determine
Calculate the total amount that Company M should report as its liability for compensated absences.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Northwest Company determined that it has an obligation relating to employees' rights to receive compensation for future absences attributable to employees’ services already rendered. The obligation relates to rights that vest, and payment of the compensation is probable. The amounts of Northwest's obligations as of December 31 are reasonably estimated as follows: Vacation pay P110,000 Sick pay 80,000 In its December 31 financial position, what amount should Northwest report as its liability for compensated absences?
Under ASC 710-10-25-1, an employer shall accrue a
liability for employees' compensation for future
absences if all the following conditions are met:
I. The employer's obligation relating to employees'
rights to receive compensation for future absences is
attributable to employees' services already
performed.
II. The paid absence can be taken in a later year-the
benefit vests (will be compensated even if
employment is terminated) or the benefit can be
accumulated over time.
III. Payment of the compensation is probable.
IV. The amount can be reasonably estimated.
If the amount cannot be reasonably estimated,
None of the other answers is correct.
O There is no need to disclose it.
The employer shall accrue a liability in balance
sheet.
The employer shall disclose it in the notes to
financial statements.
a) Calculate the total accumulated long-service leave benefit as at 30 June 2020.
b) What amount should be reported for the long-service leave provision as at 30 June 2020 in
accordance with AASB 119?
c) Prepare the journal entry for the provision for long-service leave for 30 June 2020 in accordance
with AASB 119.
d) Which employee benefits are required to be discounted in accordance with AASB 119?
Chapter 9 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 9 - Prob. 1GICh. 9 - Prob. 2GICh. 9 - List the three characteristics of a liability....Ch. 9 - Prob. 4GICh. 9 - Prob. 5GICh. 9 - Prob. 6GICh. 9 - Prob. 7GICh. 9 - Prob. 8GICh. 9 - How does materiality affect the accounting for...Ch. 9 - Distinguish between an interest-bearing note and a...
Ch. 9 - Prob. 11GICh. 9 - How should long-term debt that is callable by a...Ch. 9 - Prob. 13GICh. 9 - Prob. 14GICh. 9 - Prob. 15GICh. 9 - Prob. 16GICh. 9 - Prob. 17GICh. 9 - Prob. 18GICh. 9 - Prob. 19GICh. 9 - Prob. 20GICh. 9 - Prob. 21GICh. 9 - Prob. 22GICh. 9 - Prob. 23GICh. 9 - Prob. 24GICh. 9 - Prob. 25GICh. 9 - Prob. 26GICh. 9 - Prob. 27GICh. 9 - Prob. 28GICh. 9 - The balance in Ashwood Companys accounts payable...Ch. 9 - On September 1, 2019, a company borrowed cash and...Ch. 9 - When a company receives a deposit from a customer...Ch. 9 - Bronson Apparel Inc. operates a retail store and...Ch. 9 - Prob. 5MCCh. 9 - Prob. 6MCCh. 9 - Prob. 7MCCh. 9 - Prob. 8MCCh. 9 - Prob. 9MCCh. 9 - Prob. 10MCCh. 9 - Rescue Sequences LLC purchased inventory by...Ch. 9 - Use the same information in RE9-1 except that the...Ch. 9 - Cee Co.s fiscal year begins April 1. At the...Ch. 9 - Prob. 4RECh. 9 - Prob. 5RECh. 9 - Smith Company is required to charge customers an...Ch. 9 - Wallace Corporation summarizes the following...Ch. 9 - Borat Company gives annual bonuses after the end...Ch. 9 - Prob. 9RECh. 9 - Prob. 10RECh. 9 - After years of experience, Dilcort Company...Ch. 9 - Prob. 1ECh. 9 - Notes Payable On December 1, 2019, Insto Photo...Ch. 9 - Non-Interest-Bearing Notes Payable On November 16,...Ch. 9 - Discounting of Notes Payable On October 30, 2019,...Ch. 9 - Disclosure of Debt On May 1, 2019, Ramden Company...Ch. 9 - Short-Term Debt Expected to Be Refinanced On...Ch. 9 - Short-Term Debt Expected to Be Refinanced On...Ch. 9 - Refundable Deposits Party Warehouse Inc. rents a...Ch. 9 - Prob. 9ECh. 9 - Property Taxes Family Practice Associates has an...Ch. 9 - Prob. 11ECh. 9 - Prob. 12ECh. 9 - Prob. 13ECh. 9 - Prob. 14ECh. 9 - Prob. 15ECh. 9 - Prob. 16ECh. 9 - Prob. 17ECh. 9 - Prob. 18ECh. 9 - Prob. 19ECh. 9 - Prob. 20ECh. 9 - Cash Rebates On January 1, 2020, Fro-Yo Inc. began...Ch. 9 - Prob. 22ECh. 9 - Prob. 1PCh. 9 - Notes Payable and Effective Interest On November...Ch. 9 - Trade Note Transactions Adjusto Corporation (which...Ch. 9 - Prob. 4PCh. 9 - Short-Term Debt Expected to Be Refinanced On...Ch. 9 - Non-Interest-Bearing Note Payable: Present Value...Ch. 9 - Prob. 7PCh. 9 - Prob. 8PCh. 9 - Payroll and Payroll Taxes Bailey Dry Cleaners has...Ch. 9 - Bonus Obligation and Income Tax Expense James...Ch. 9 - Prob. 11PCh. 9 - Contingencies Fallon Company, a toy manufacturer...Ch. 9 - Prob. 13PCh. 9 - Assurance-Type Warranty Clean-All Inc. sells...Ch. 9 - Prob. 15PCh. 9 - Premium Obligation Yummy Cereal Company is...Ch. 9 - Comprehensive Selected transactions of Lizard Lick...Ch. 9 - Comprehensive Selected transactions of Shadrach...Ch. 9 - Prob. 1CCh. 9 - Prob. 2CCh. 9 - Prob. 3CCh. 9 - Pending Damage Suit Disclosure On December 15,...Ch. 9 - Various Contingency Issues Skinner Company has the...Ch. 9 - Prob. 6CCh. 9 - Prob. 7CCh. 9 - Prob. 8CCh. 9 - Prob. 10C
Knowledge Booster
Similar questions
- Under IAS 19 on Employee Benefits, which of the following terms best describes other long-term employee benefits a. Benefits not falling due wholly within twelve months of the end of the period in which the service is rendered. b. Benefits which are payable after completion of employment c. Benefits payable as a result of an entity's decision to end an employment before the normal retirement care. d. Benefits which fall due within twelve months of the end of the period in which the service is rendered.arrow_forwardAn employer who is subject to FUTA must file form 940 with the federal government. Normally, the form must be filed by February 1 ; however if all deposits are made on a timely basis, the form may be filed by February 10 . The total taxable wages are computed by deducting exempt payments and wages paid to each employee in excess of _____________ from the total wages paid during the year.arrow_forwardOn September 1, 2020, Howe Company offered special termination benefits to employees who had reached the early retirement age specified in the entity's pension plan. The termination benefits consisted of lump sum and periodic future payments. Additionally, the employees accepting the entity offer receive the usual early retirement pension benefits. The offer expired on November 30, 2020. Actual or reasonably estimated amounts on December 31, 2020 relating to the employees accepting the offer are as follows: Lump sum payments made on January 1, 2021 475,000 Present value of periodic payments of P60,000 annually for 3 years which will begin January 1, 2022 Reduction of accrued pension cost on December 31,2020 for terminating employees 155,000 45,000 2. What amount should be recognized in profit or loss as a result of the termination benefits in 2020? a. 630,000 b. 475,000 C. 585,000 d. 45,000arrow_forward
- In 2020, Schedule 1 of Form 1040 is used to report: a.Salary income. b.Unemployment compensation. c.Capital gains and losses. d.Withholding on wages.arrow_forward) For 2021; An employer may provide an employee with a reimbursement of up to _________ of qualified education expense without including any of that payment as income to the employee. A. 3650 B. 4200 C. 10500 D. The entire amount is income to the employeearrow_forwardIn 2020, Schedule 1 of Form 1040 is used to report: a. Capital gains and losses. b. Unemployment compensation. c. Salary income. d. Withholding on wages.arrow_forward
- On September 1, 2021, Di Lion Corporation offered special termination benefits to employees who had reached the early retirement age specified in the company’s pension plan. The termination benefits consisted of lump-sum and periodic future payments. Additionally, the employees accepting the company offer receive the usual early retirement pension benefits. The offer expired on November 30, 2021. Actual or reasonably estimated amounts at December 31, 2021 relating to the employees accepting the offer are as follows:A. Lump-sum payments totaling P475,000 were made on January 1, 2022.B. Periodic payments totaling P60,000 annually for 3 years will begin January 1, 2023. The present value at December 31, 2011 of these payments was P155,000.C. Reduction of accrued pension costs at December 31, 2021 of these payments was P45,000. a. At December 31, 2021, Di Lion should report a total liability for special termination benefits of: b. What amount should be reported as loss on…arrow_forwardAn employer's obligation for post-retirement benefits that are expected to be provided to an employee must be fully accrued by the date the a. Benefits are utilized b. Employee is fully eligible for benefits c. Employee retires d. Benefits are paidarrow_forwardDuring 2019, the Electric Company experienced a difference between its expected and actual projected benefit obligation. At the beginning of 2020, Electric's actuary notified them of the following accumulated information related to their plan: Net loss (1/1/2020) $165,000 Actual projected benefit obligation (1/1/2020) $356,000 Fair value of plan assets (1/1/2020) $865,000 On December 31, 2020, Electric is in the process of calculating the net gain or loss to include in its pension expense for 2020. The average remaining service life of its employees is 10 years and there are no differences between the company's expected and annual rate of return on plan assets in 2020. Required:Compute the amount of the net gain or loss to include in the pension expense for 2020. Note whether it is an addition or subtraction to the pension expense.arrow_forward
- Bridgeport Company began operations on January 2, 2019. It employs 11 individuals who work 8-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. Sick Days Used by Each Employee Actual Hourly Vacation Days Used Wage Rate by Each Employee 2019 2020 2019 2020 2019 2020 $7 $8 9. Bridgeport 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. (a) Prepare journal entries to record transactions related to compensated absences during 2019 and 2020. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent…arrow_forwardWhich of the following statements is correct regarding limitations on employer's contributions to qualified retirement plans in 2021? a. Defined benefit plans are limited to an annual benefit to an employee of the lesser of $58,000 or 100% of the employee's average compensation for the highest three years. b. Defined contribution plan contributions are limited to the lesser of $230,000 or 25% of an employee's compensation. c. Defined contribution plan contributions are limited to the lesser of $58,000 or 100% of an employee's compensation. d. If an employer has more than one type of qualified plan, a maximum deduction of 100% of compensation is allowed.arrow_forwardPrepare journal entry to record the total liabilities for termination benefits.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT