A company gives each of its 50 employees (assume they were all employed continuo

Question

A company gives each of its 50 employees (assume they were all employed continuously through 2012 and 2013) 12 days of vacation a year if they are employed at the end of the year. The vacation accumulates and may be taken starting January 1 of the next year. The employees work 8 hours per day. They make S21 per hour. During 2013, they took an average of 9 days of vacation each. The company's policy is to record the liability existing at the end of each year at the wage rate for that year. What amount of vacation liability would be reflected on the 2012 and 2013 balance sheets, respectively? 6. 7. Assume a weekly payroll of $10,000 entirely subject to FICA and Medicare (7.65%), Federal and State unemployment tax (0.8% federal and 4% state) with Income Tax withholdings of 20% and union dues withheld at $90, what are the employee and employer payroll JEs 8. Menards provides an 11% rebate on all sales during the month of May. There were 1,000,000 dollars in sales. $300,000 was received in cash and $700,000 was visa receivable. The cost of inventory was $400,000. Menards expects about 10% of sales to actually send in receipts for the rebate. Prepare ALL entries for May sales and contingent liabilities.

Explanation / Answer

6. Vacation liability for 2012 = 12 days*8 hours per day*$21 per hour*50 employees

= $100,800

Vacation liability for 2013: No. of days of leaves availed = 9. Balance left = 12-9 = 3

Total closing balance of no. of days of leaves = 12+3 = 15 days

Thus vacation liability for 212 = 15 days**8 hours per day*$21 per hour*50 employees

= $126,000

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