Question

Metlock Company began operations on January 2, 2019. It employs 9 individuals who work 8-hour days and are paid hourly. Each employee earns 11 paid vacation days and 8 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
$11			$12			0		10		6		7

Metlock 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.

Part 1

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)

Part 2

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	Account Titles and Explanation	Debit	Credit
2019	Salaries and Wages Expense	$                 8,712.00
	Salaries and Wages Payable		$              8,712.00
	(To accrue the expense and liability for vacations)
	9 employees X $11.00 hourly X 8 Hours a day X 11 days
	Salaries and Wages Expense	$                 6,336.00
	Salaries and Wages Payable		$              6,336.00
	(To accrue the expense and liability for  Sick Pay)
	9 employees X $11.00 hourly X 8 Hours a day X 8 days
	Salaries and Wages Payable	$                 4,752.00
	Cash		$              4,752.00
	To record payment for compensated time when used by employees
	9 employees X $1100/hr. X 8 hrs./day X 6 days
2020	Salaries and Wages Expense	$                 9,504.00
	Salaries and Wages Payable		$              9,504.00
	(To accrue the expense and liability for vacations)
	9 employees X $12.00 hourly X 8 Hours a day X 11 days
	Salaries and Wages Expense	$                 6,912.00
	Salaries and Wages Payable	$              6,912.00
	(To accrue the expense and liability for  Sick Pay)
	9 employees X $12.00 hourly X 8 Hours a day X 8 days
	Salaries and Wages Expense	$                    720.00
	Salaries and Wages Payable	$                 7,920.00
	Cash		$              8,640.00
	(To record vacation time paid)
	9 employees X $11/hr. X 8 hrs./day X 10 days	$                 7,920.00
	9 employees X $12/hr. X 8 hrs./day X 10 days	$                 8,640.00
	Salaries and Wages Expense	$                    144.00
	Salaries and Wages Payable (1584 +4320)	$                 5,904.00
	Cash		$              6,048.00
	(To record sick leave paid)
	9 employees X $11/hr. X 8 hrs./day X (8-6)days	$                 1,584.00
	9 employees X $12/hr. X 8 hrs./day X( 7-2days)	$                 4,320.00
	9 employees X $12/hr. X 8 hrs./day X 7 days	$                 6,048.00
b) Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2016 and 2017. (Round answers to 0 decimal places, e.g. 5,125.)	2019	2020
	Vacation Wages Payable
	Beginning balance	0	$              8,712.00
	+ accrued	$                 8,712.00	$              9,504.00
	- paid	0	$              7,920.00
	Accrued liability on Dec. 31 balance	$                      8,712	$                 10,296
	Sick Pay Wages Payable
		2019	2020
	Vacation Wages Payable
	Beginning balance	0	$              1,584.00
	+ accrued	$                 6,336.00	$              6,912.00
	- paid	$                 4,752.00	$              5,904.00
	Accrued liability on Dec. 31 balance	$                      1,584	$                   2,592