2. (P13-12) INK Co has 35 employees who work 8-hour days and are paid hourly. On...

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2. (P13-12) INK Co has 35 employees who work 8-hour days and are paid hourly. On January 1, 2018, the company began a program

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Answer 1

Answer #1

Journal Entry on 31st December, 2018
	Debit	Credit	Working
	$	$
Employee Cost	72240		35 Employees * 8 Hours * Hourly wage (i.e. $25.80) * Vacation days unutilised by employee (i.e. 10 days)
Provision for compensated Absences		72240

(Being Liability created for compensated Absences)

Profit and Loss	72240
Employee Cost		72240
(Being the amount charged to profit and loss account)

Hence the Correct Answer is Option C as the amount which is reported on income statement for 2018 is $ 72240

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Answer 2

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2. (P13-12) INK Co has 35 employees who work 8-hour days and are paid hourly. On...

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2. (P13-12) INK Co has 35 employees who work 8-hour days and are paid hourly. On...

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