On January 1, 2018, Poplar Fabricators Corporation agreed to grant its employees

Question

On January 1, 2018, Poplar Fabricators Corporation agreed to grant its employees two weeks' vacation each year, with the stipulation that vacations earned each year can be taken the following year. For the year ended December 31, 2018, Poplar Fabricators' employees each earned an average of $950 per week. Seven hundred vacation weeks earned in 2018 were not taken during 2018. Required 1. Prepare the appropriate adjusting entry for vacations earned but not taken in 2018 2. Suppose that, by the time vacations actually are taken in 2019, wage rates for employees have risen by an average of 4 percent from their 2018 level. Also, assume wages earned in 2019 (including vacations earned and taken in 2019) were $32 million. Prepare a journal entry that summarizes 2019 wages and the payment for 2018 vacations taken in 2019. Complete this question by entering your answers in the tabs below Required 1Required 2 Prepare the appropriate adjusting entry for vacations earned but not taken in 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the adjusting entry for vacations earned but not taken in 2018. Note: Enter debits before credits. Event General Journal Debit Credit

Explanation / Answer

1) Wages Expenses ( 700 weeks x $950 per week) $ 665,000

Liability - compensated future abscenes $665,000

2)  Liability - compensated future abscenes $665,000

Wages Expense [(4% x $665,000) + $32 million) $32,026,600

Cash or Wages Payable $32,691,600

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.