monsters Inc began operations on January 1, 2019. The company employs 15 monsters whose jobs are...
monsters Inc began operations on January 1, 2019. The company employs 15 monsters whose jobs are to scare little children. They are paid eight-hour days and are paid hourly. Each employee earns 15 paid vacation days and 10 paid sick days annually. Vacation days may be taken immediately. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional information is as follows:
Actual Hourly
Wage Rate 2019........ 2020
.....................$14... ...... $15
Vacation Days Used by Each Employee
2019 ...............2020
12 14
Sick Days Used by Each Employee
2019 .................2020
10.......................8
Monsters Inc has chosen to accrue the cost of compensated absences at rates of pay in effect during the period when they are earned and to accrue sick pay when it is earned.
Required:
a) Prepare journal entry(ies) to record the transactions related to vacation
entitlement during 2019 and 2020.
b) Prepare journal entry(ies) to record the transactions related to sick days
during 2019 and 2020.
c) Calculate the amounts of any liability for vacation pay and sick days that
should be reported on the balance sheet at December 31, 2019 and 2020
Homework Answers
|
USED (EACH EMP) |
USED (EACH EMP) |
UN USED (EACH EMP) |
UN USED (EACH EMP) |
|||
|
PARTICULARS |
2019 |
2020 |
2019 |
2020 |
2019 |
2020 |
|
NO OF EMPLOYEES |
15 |
15 |
15 |
15 |
15 |
15 |
|
PAID VACATION |
15 |
15 |
12 |
14 |
3 |
1 |
|
SICK VACATION |
10 |
10 |
10 |
8 |
0 |
2 |
|
WAGE RATE |
14 |
15 |
||||
|
HOURS OF WORK PER DAY |
8 |
8 |
||||
|
NO OF DAYS IN A YEAR |
313 |
313 |
EXCEPT SUNDAYS |
|||
|
TOTAL YEARLY WAGE |
525840 |
563400 |
FOR 15 EMPLOYEES |
|||
|
RATE PER DAY |
1680 |
1800 |
||||
|
A. VACATION ENTITLEMENT - ON UNUSED LEAVES AT END OF YEAR |
JOURNAL ENTRY |
|||||
|
2019 |
2020 |
2019 |
DR |
CR |
||
|
NO OF UNUSED VACATIONS |
3 |
1 |
||||
|
NO FO WORKERS |
15 |
15 |
LEAVE ENCASHMENT DR |
75600 |
||
|
TOTSL UNUSED VACATIONS |
45 |
15 |
TO PROVISION FOR LEAVE ENCASHMENT |
75600 |
||
|
RATE PER DAY |
1680 |
1800 |
||||
|
LIABILITY AT YEAR END |
75600 |
27000 |
2020 |
DR |
CR |
|
|
LEAVE ENCASHMENT DR |
27000 |
|||||
|
TO PROVISION FOR LEAVE ENCASHMENT |
27000 |
|||||
|
B. SICK DAYS |
JOURNAL ENTRY |
|||||
|
2019 |
2020 |
2020 |
DR |
CR |
||
|
NO OF UNUSED SICK VACATIONS |
0 |
2 |
SICK LEAVE DR |
54000 |
||
|
NO FO WORKERS |
15 |
15 |
TO PROVISION FOR SICK LEAVE |
54000 |
||
|
TOTSL UNUSED VACATIONS |
0 |
30 |
||||
|
RATE PER DAY |
0 |
1800 |
||||
|
LIABILITY AT YEAR END |
0 |
54000 |
||||
|
C. LIABILITY TO BE POSTED ON BALANCE SHEET |
||||||
|
2019 |
2020 |
|||||
|
VACATION PAY |
75600 |
27000 |
||||
|
SICK PAY |
0 |
54000 |
||||
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