Question

Exercise 13-03 Oriole Company began operations on January 2, 2019. It employs 10 individuals who work 8-hour days and are paid hourly. Each employee earns 9 paid vacation days and 7 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 2019 2020 $12 $13 Vacation Days Used by Each Employee 2019 2020 Sick Days Used by Each Employee 2019 _ 2020 Oriole 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. Your answer is partially correct. Try again. 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 o for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 2010 Salaries and Wages Expen: 8640 8640 T Salaries and Wages Pay (To accrue the expense and liability for vacations) Salaries and Wages Expen: 6720 Salaries and Wages Pay 6720
PLEASE SHOW ALL WORK!

Answer 1

Date	Accounts titles and explanation	Debit	Credit
2019	salaries and wages expense	$ 8,640
	Salaries and wages payable		$ 8,640
	( 10 employees * $ 12 per hour * 8 hours per day * 9 days )
	( to accrue the expenses and liability for vacations )
2019	salaries and wages expense	$ 6,720
	Salaries and wages payable		$ 6,720
	( 10 employees * $ 12 per hour * 8 hours per day * 7 days )
	( to accrue the expenses and liability for sick pay )
2019	Salaries and wages payable	$ 4,800
	Cash		$ 4,800
	( 10 employees * $ 12 per hour * 8 hours per day * 5 days )
	( to record payment for compensated time when used by employees)
2020	salaries and wages expense	$ 9,360
	Salaries and wages payable		$ 9,360
	( 10 employees * $ 13 per hour * 8 hours per day * 9 days )
	( to accrue the expenses and liability for vacations )
2020	salaries and wages expense	$ 7,280
	Salaries and wages payable		$ 7,280
	( 10 employees * $ 13 per hour * 8 hours per day * 7 days )
	( to accrue the expenses and liability for sick pay )
2020	salaries and wages expense ($ 8,320 - $ 7,680 )	$ 640
	Salaries and wages payable	$ 7,680
	( 10 employees * $ 12 per hour * 8 hours per day * 8 days )
	Cash		$ 8,320
	( 10 employees * $ 13 per hour * 8 hours per day * 8 days )
	( to record Vacation time paid )
2020	salaries and wages expense ($ 6,240 - $ 6,080 )	$ 160
	Salaries and wages payable ( see note 1 )	$ 6,080
	Cash		$ 6,240
	( 10 employees * $ 13 per hour * 8 hours per day * 6 days )
	( to record sick leave paid )

NOTE 1 :

( 10 employees * $ 12 per hour * 8 hours per day * 2 days )+ ( 10 employees * $ 13 per hour * 8 hours per day * 4 days )

$ 1,920 + $ 4,160 = $ 6,080

B) 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	$ 8,640	$ 10,320
Sick pay wages payable	$ 1,920	$ 3,120
( all explanation is given below in note 2 )

note 2 :
	2019	2019
	Vacation wages payable	Sick pay wages payable
Jan 1 Balance	$ 0	$ 0
Plus : Accrued	$ 8,640	$ 6,720
Less: Paid	( $ 0 )	($ 4,800)
Dec 31, Balance	$ 8,640	$ 1,920
	2020	2020
	Vacation wages payable	Sick pay wages payable
Jan 1 Balance	$ 8,640	$ 1,920
Plus : Accrued	$ 9,360	$ 7,280
Less: Paid	($ 7,680)	($ 6,080)
Dec 31, Balance	$ 10,320	$ 3,120