Question

Concord Company began operations on January 2, 2019. It employs 11 individuals who work 8-hour days and are paid hourly. Each employee earns 10 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. Actual Hourly Wage Rate Vacation Days Used by Each Employee Sick Days Used by Each Employee 2019 2020 2019 2020 2019 2020 $7 $8 0 9 4 5 Concord 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

Prepare journal entries to record transactions related to compensated absences during 2019 and 2020. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 2019 enter an account title to accrue the expense and liability for vacations enter a debit amount enter a credit amount enter an account title to accrue the expense and liability for vacations enter a debit amount enter a credit amount (To accrue the expense and liability for vacations) enter an account title to accrue the expense and liability for sick pay enter a debit amount enter a credit amount enter an account title to accrue the expense and liability for sick pay enter a debit amount enter a credit amount (To accrue the expense and liability for sick pay) enter an account title to record payment for compensated time when used by employees enter a debit amount enter a credit amount enter an account title to record payment for compensated time when used by employees enter a debit amount enter a credit amount (To record payment for compensated time when used by employees) 2020 enter an account title to accrue the expense and liability for vacations enter a debit amount enter a credit amount enter an account title to accrue the expense and liability for vacations enter a debit amount enter a credit amount (To accrue the expense and liability for vacations) enter an account title to accrue the expense and liability for sick pay enter a debit amount enter a credit amount enter an account title to accrue the expense and liability for sick pay enter a debit amount enter a credit amount (To accrue the expense and liability for sick pay) enter an account title to record vacation time paid enter a debit amount enter a credit amount enter an account title to record vacation time paid enter a debit amount enter a credit amount enter an account title to record vacation time paid enter a debit amount enter a credit amount (To record vacation time paid) enter an account title to record sick leave paid enter a debit amount enter a credit amount enter an account title to record sick leave paid enter a debit amount enter a credit amount enter an account title to record sick leave paid enter a debit amount enter a credit amount (To record sick leave paid) LINK TO TEXT

Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2019 and 2020. 2019 2020 Vacation Wages Payable $enter a dollar amount $enter a dollar amount Sick Pay Wages Payable $enter a dollar amount $enter a dollar amount

Answer 1

Date	Accounts title and explanation	Debit	Credit
2019	To accrue the expense and liability for vacations
	Salaries and Wages expense	6160
	Salaries and wages payable		6160
	To accrue the expense and liability for sick pay
	Salaries and wages expense	3696
	Salaries and wages payable		3696
	To record payment for compensated time when used by employee
	Salaries and wages payable	2464
	Cash		2464
	To accrue the expense and liability for vacations
2020	Salaries and wages expense	7040
	Salaries and wages payable		7040
	To accrue the expense and liability for sick pay
	Salaries and wages expense	4224
	Salaries and wages payable		4224
	To record vacation time paid
	Salaries and wages expense	792
	Salaries and wages payable	5544
	Cash		6336
	To record sick leave paid
	Salaries and wages expense	176
	Salaries and wages payable	3344
	Cash		3520

Employees (a)	per hour (b)	hours per day (c)	Days (d)	a*b*c*d
11	7	8	10	$ 6,160
11	7	8	6	$ 3696
11	7	8	4	$ 2464
11	8	8	10	$ 7040
11	8	8	6	$ 4224
11	7	8	9	$ 5544
11	7	8	2	$ 1232
11	8	8	3	$ 2112	$3344
11	8	8	9	$ 6336
11	8	8	5	$ 3520	$9856

2. Computation of liability for compensated absences

For 2019,

	Vacation	sick pay
Jan 1 balance	$ 0	$ 0
Plus accrued	$ 6160	$ 3696
Less paid	$ 0	$ (2464)
Dec 31 balance	$ 6160	$ 1232

For 2020,

	Vacation	Sick pay
Jan 1 balance	$6160	$1232
Plus accrued	7040	4224
Less paid	(5544)	(3344)
Dec 31 balance	7656	2112