ctual Hourly Wage Rate Vacation Days Used by Each Employee Sick Days Used by Eac
ID: 2603675 • Letter: C
Question
ctual Hourly
Wage Rate
Vacation Days Used
by Each Employee
Sick Days Used
by Each Employee
2016
2017
2016
2017
2016
2017
prepare journal entries to record transactions related to compensated absences during 2016 and 2017-Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2016 and 2017.
Sandhill Company began operations on January 2, 2016. It employs 11 individuals who work 8-hour days and are paid hourly. Each employee earns 9 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.ctual Hourly
Wage Rate
Vacation Days Used
by Each Employee
Sick Days Used
by Each Employee
2016
2017
2016
2017
2016
2017
$10 $11 0 8 4 5Sandhill 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
Explanation / Answer
Answer
(1)Prepare journal entries to record transactions related to compensated absences during 2016
2016 To accure expense and liability for vacations
Salaries and wages expense 7920
Salaries and wages Payable 7920
2016 To accure expense and liability for sick pay
Salaries and wages expense 5280
Salaries and wages Payable 5280
2016 To record sick leave Paid
Salaries and wages Payable 3520
Account Title 3520
(2)Prepare journal entries to record transactions related to compensated absences during 2017
2017 To accure expense and liability for vacations
Salaries and wages expense 8712
Salaries and wages Payable 8712
2017 To accure expense and liability for sick pay
Salaries and wages expense 5808
Salaries and wages Payable 5808
2017 To record vacation time paid
Salaries and Wages Expense 704
Salaries and wages Payable 7040
To Account Title A/C 7744
2017 To record sick leave paid
Salaries and Wages Expense 176
Salaries and wages Payable 4664
To Account Title A/C 4840
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