Question

Flint Company began operations on January 2, 2016. It employs 9 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						Vacation Days Used by Each Employee				Sick Days Used by Each Employee
2016			2017			2016		2017		2016		2017
$6			$7			0		8		5		6

Flint 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.

Journal entries

2016                                                                                                                       debit                     credit

-

-

(to accrue the expense and liability for vacations)

-

-

(expense and liability for sick pay)

-

-

(to record payment for compensated time when used by employees)

2017

-

-

(to accrue exp and liab for vactions)

-

-

(accrue exp and liab for sick pay)

-

-

-

(record vacation time paid)

-

-

-

(to record sick leave pay)

Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2016 and 2017.

                                                                2016                       2017

Vacation wages payable

Sick pay wages payable

Answer 1