Question

Vaughn Company began operations on January 2, 2016. It employs 12 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
$9			$10			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.

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.)

Answer 1

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Format and Naming convention is not available, can be slightly different: Solution: ournal entries Account title and explaination Debit Credit $ 7,776 2016Salaries and Wages Expense (12*9)*(9*8) $ 7,776 Salaries and Wages Payable To record the expense and liability for vaction) $ 5,184 Salaries and Wages Expense (126)(9*8) Salaries and Wages Payable $ 5,184 To record the expense and liability for sick leave) (12*4)*(9*8) $3,456 Salaries and Wages Payable 5 3,456 Cash To record the sick leave paid) $8,640 2017 Salaries and Wages Expense (12*9)*(10*8) $ 8,640 Salaries and Wages Payable To record the expense and liability for vaction) $ 5,760 Salaries and Wages Expense (12%)*(10*8) s 5.760 Salaries and Wages Payable To record the expense and liability for sick leave) (plug) $ 768 Salaries and Wages Expense $6,912 Salaries and Wages Payable (128)(9*8) (12"8) (10*8) Cash 7,680 To record the Vacation time paid) $ 192 Salaries and Wages Expense | $ Salaries and wages Payable (12*2)*(9*8)+[(12%)"(10*8)) 4,608 $ 4,800 Cash (12*5)*(10*8) To record the Sick leave paid)