Consider the following information for YumYum Inc. as of December 31, 2015: YumY
ID: 2415832 • Letter: C
Question
Consider the following information for YumYum Inc. as of December 31, 2015:
YumYum has a service contract with a maintenance company. The contract is for cleaning
services at a rate of $3,000 per month. The maintenance company bills YumYum semiannually
on October 1 and April 1. The contract commenced on October 1, 2015.
During 2015, YumYum received advances from customers for the first time. Total collections in
2015 were $100,000. At December 31, 2015, $30,000 of the advances had not been earned.
In 2015, YumYum had 50 employees. Each employee earned 10 days of vacation pay. The actual rate for 2005 was $300 per day. During 2015, 10 employees used all of their vacation days for 2015. At January 1, 2015, the Vacation Payable account had a balance of $10,000.
What is the amount of Vacation Payable at December 31, 2015?
debit to Vacation Payable
credit to Payroll Expense
credit to Cash
credit to Vacation Payable
debit to Vacation Payable
credit to Payroll Expense
credit to Cash
credit to Vacation Payable
Explanation / Answer
Vacation Payable as on January 1, 2015 : $ 10,000
Used by by employees durig the year : $ 30,000
($300 x 10) X 10
Vacation Payable at December 31, 2015 $ $40,000
So US$ 30,000 to be credit to vacation payable account.
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