Question

Exercise 13-3 (Part Level Submission) Vaughn Company began operations on January 2, 2016. It employs 10 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. Actual Hourly Wage Rate Vacation Days Used by Each Employee Sick Days Used by Each Employee 2016 2017 2016 2017 2016 2017 $11 $12 0 8 4 5 Vaughn 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.

(a) Prepare journal entries to record transactions related to compensated absences during 2016 and 2017. (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 2016 (To accrue the expense and liability for vacations) (To accrue the expense and liability for sick pay) (To record payment for compensated time when used by employees) 2017 (To accrue the expense and liability for vacations) (To accrue the expense and liability for sick pay) (To record vacation time paid) (To record sick leave paid)

Answer 1

ANSWER:

Ref		Account Tittle	Debit	Credit
-1	2016	Salaries and Wages Expense	7,920
		Salaries and Wages Payable		7,920
		To accrue the expense and liability for vacations
-2	2016	Salaries and Wages Expense	3,520
		Salaries and Wages Payable		3,520
		To record sick leave paid
	2016	No entry,
		since no vacation days were used.
		To record vacation time paid
-3	2017	Salaries and Wages Expense	8,640
		Salaries and Wages Payable		8,640
		To accrue expense and liability for vacations
-4	2017	Salaries and Wages Expense	4,800
		Cash		4,800
		To record sick leave paid
	2017	Salaries and Wages Expense	640
-5		Salaries and Wages Payable	7,040
-6		Cash		7,680
		To record vacation time paid

	employees		per hour		hours per day		days
-1	10	*	11	*	8	*	9	=	7920	-1
-2	10	*	11	*	8	*	4	=	3520	-2
-3	10	*	12	*	8	*	9		8640	-3
-4	10	*	12	*	8	*	5	=	4800	-4
-5	10	*	11	*	8	*	8	=	7040	-5
-6	10	*	12	*	8	*	8	=	7680		-6

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