Question

Crash Airlines provides the following fringe benefits to its employees. For each benefit, state whether or not an accounting entry would be needed at the end of the year to accrue the cost of the benefit. State your justification for each answer.

1.Each employee earns two days of paid sick leave for each 160 hours he or she works for the company.

2.Each employee is also permitted to fly free of charge on any Crash Airlines flight that is not fully booked with customers. The employee may take as many flights in the course of a year as he or she wishes.

Answer 1

AOS Crash Airlines the 7 A compensated absence is employee time off d with pay which can rise in such situations as sick leave, holidays, vacations and jury duty - An employer should accrue a liability for compensated absences payable to employees, if o all of the following conditions are met. no • The payment obligation for future absence is based on employee senwice Mready rendered • The amount of i The obligation can be ... 1 AN neosonably estimated • Payment is probable. 1942 . The obligation is for employee right that was vest on accumulate da 7 Ikla compensated absence has non vesting - rights and the rights expine at the end of the year in which they are earned, then no need to accrue a liability ans for futune absence on t will idest on is an area ea no JAN 20toi i do plano 2010 maar na 9 - 3ിരം , വിപി പ്

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- The The payment obligation is not based on Scarice rendened. It is based on vacant seat in the flight obligation amount can't be estimated. of payment is not probable. a obligation for employee right is not vested. Hence in this case an accounting entry would not be seeded at the end of the year to accrue the cost of the benepit.