Matt Broderick Company began operations on January 2, 2013. It employs 9 individuals who work
Exam (elaborations)
Matt Broderick Company began operations on January 2, 2013. It employs 9 individuals who work
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Course
Matt Broderick Company began operations on January 2, 2013. It employs 9 individuals who work
Institution
Liberty University
Matt Broderick Company began operations on January 2, 2013. It employs 9 individuals who work 8-hour days and are paid hourly. Each employee earns 10 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...
matt broderick company began operations on january 2
2013 it employs 9 individuals who work 8 hour days and are paid hourly each employee earns 10 paid vacation days and 6 paid sick days annually
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Liberty University
Matt Broderick Company began operations on January 2, 2013. It employs 9 individuals who work
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Question:
Matt Broderick Company began operations on January 2, 2013. It employs 9 individuals who work 8-
hour days and are paid hourly. Each employee earns 10 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 Vacation Days Used Sick Days Used
Wage Rate by Each Employee by Each Employee
2013 2014 2013 2014 2013 2014
$10 $11 0 9 4 5
Matt Broderick 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.
Instructions
(a) Prepare journal entries to record transactions related to compensated absences during 2013 and
2014.
(b) Compute the amounts of any liability for compensated absences that should be reported on the
balance sheet at December 31, 2013 and 2014.
Answer:
(a) 2013
To accrue expense and liability for vacations
Salaries and Wages Expense.............................................................. 7,200
Salaries and Wages Payable.................................................. 7,200 (1)
To accrue the expense and liability for sick pay
Salaries and Wages Expense.............................................................. 4,320 (2)
Salaries and Wages Expense................................................. 4,320
, To record payment for compensated time when used by employees
Salaries and Wages Payable............................................................... 2,880 (3)
Cash...................................................................................... 2,880
2014
To accrue the expense and liability for vacations
Salaries and Wages Expense.............................................................. 7,920
Salaries and Wages Payable.................................................. 7,920 (4)
To accrue the expense and liability for sick pay
Salaries and Wages Expense.............................................................. 4,752
Salaries and Wages Payable.................................................. 4,752 (5)
To record vacation time paid
Salaries and Wages Expense.............................................................. 648
Salaries and Wages Payable............................................................... 6,480 (6)
Cash...................................................................................... 7,128 (7)
To record sick leave paid
Salaries and Wages Expense.............................................................. 144
Salaries and Wages Payable............................................................... 3,816 (8)
Cash...................................................................................... 3,960 (9)
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