30s4:09/4:37 Knowledge Check 01 Annually, Monet Corp, awards each of its employe

Question

30s4:09/4:37 Knowledge Check 01 Annually, Monet Corp, awards each of its employees two weeks of paid vacation, which can be carried over if not used As of December 31, Year 1, the company determined that there are 20 vacation weeks eligible for carryover. During Year 1, compensation averaged $1,000 per week That average compensation amount is expected to increase to $1,030 during Year 2 when that vacation time will be taken. What is the liability that should be reported for vacation pay in the company's balance sheet prepared as of December 31, Year 1? Photo Booth7f 13 K Pr N 23 MacBook Air 2 3

Explanation / Answer

Liability = $1000 x 20 weeks $20,000.00 Company should recongnize the expense and related liability for compensated absence earned by the employees.

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