Ans) a)
Journal Entries | |||
for the year 2016 | |||
Year | Transactions | Debit | Credit |
2016 | Salary & Wages Exp a/c | 7,200 (i) | |
To Salary & Wages Payable a/c | 7,200(i) | ||
(being accrue expenses for vacations) | |||
2016 | Salary & Wages Exp a/c | 4320(ii) | |
To Salary & Wages Payable a/c | 4320(ii) | ||
(being accrue expenses for sick leave pay) | |||
2016 | Salary & Wages Payable a/c | 2880(iii) | |
To cash a/c | 2880(iii) | ||
(being sick leave paid) | |||
Calculations;
Formula-
Amount = Employees * Per hour * working hours per day * no of days
i) Amount= 9* $10*8*10= 7200
ii) Amount= 9* $10*8*6= 4320
iii) Amount= 9* $10*8*4= 2880
Journal Entries | |||
for the year 2017 | |||
Year | Transactions | Debit | Credit |
2017 | Salary & Wages Exp a/c | 7920(i) | |
To Salary & Wages Payable a/c | 7920(i) | ||
(being accrue the expenses for vacations) | |||
2017 | Salary & Wages Exp a/c | 4752(ii) | |
To Salary & Wages Payable a/c | 4752(ii) | ||
(being accure expenses for sick leave pay) | |||
2017 | Salary & Wages Exp a/c | 648 | |
Salary & Wages Payable a/c | 6480(iii) | ||
To Cash a/c | 7128(v) | ||
(being payment of vacation period) | |||
2017 | Salary & Wages Exp a/c | 144 | |
Salary & Wages Payable a/c | 3816(iv) | ||
To Cash a/c | 3960(vi) | ||
(being payment for sick leave) | |||
Calculations;
Formula as stated above;
Amount= Employees * Per hour * working hours per day * no of days
i) amount= 9*$11*8*10=7920
ii) amount= 9*$11*8*6= 4752
iii) amount= 9*$10*8*9= 6480
iv) amount= (9*$11*8*3)2376 + 1440 (9*$10*8*2)=3816
v) amount= 9*$11*8*9= 7128
vi) amount= 9*$11*8*5= 3960
Note; amount for sick days and vacation paid at current wage. The FIFO (first in first out) basis has been applied whenever the payment needed to be done at different rates.
Ans b) 2016
Vacation wages | Sick pay | |
payable | wages payable | |
1-Jan | $0 | $0 |
add; accrued | 7200 | 4320 |
less; paid | -2880 | |
Balance | 7200(i) | 1440(ii) |
2017
Vacation wages | Sick pay | |
payable | wages payable | |
1-Jan | $7,200 | $1,440 |
add; accrued | 7920 | 4752 |
less; paid | -6480 | -3816 |
Balance | 8640(iii) | 2376(iv) |
Calculations;
Formula- Amount= Employees * Per hour * working hours per day * no of days
i) amount= 9*$10*8*10=7200
ii) amount= 9*$10*8*2=1440
iii) amount= (9*$10*8*1)720+ (9*$11*8*10)7920=8640
iv) amount= 9*$11*8*3= 2376
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