To accrue expense and liability for sick pay salaries

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To accrue expense and liability for sick pay Salaries and Wages Expense 5,184 Salaries and Wages Payable 5,184 (2) 2012 To record sick leave paid Salaries and Wages Payable 3,456 (3) Cash 3,456 2013 To accrue the expense and liability for vacations Salaries and Wages Expense 8,640 Salaries and Wages Payable 9,360 (4) 2013 To accrue the expense and liability for sick pay Salaries and Wages Expense 5,616 Salaries and Wages Payable 5,616 (5) 2013 To record vacation time paid Salaries and Wages Expense 648 Salaries and Wages Payable 7,776 (6) Cash 8,424 (8) 2013 To record sick leave paid Salaries and Wages Expense 144 Salaries and Wages Payable 4,536 (6) Cash 4,680 (8) employees per hour hours per day days (1) 9 × $12.00 × 8 × 10 = $8,640 (1) (2) 9 × $12.00 × 8 × 6 = $5,184 (2) (3) 9 × $12.00 × 8 × 4 = $3,456 (3) (4) 9 × $13.00 × 8 × 10 = $9,360 (4) (5) 9 × $13.00 × 8 × 6 = $5,616 (5) (6) 9 × $12.00 × 8 × 9 = $7,776 (6) 9 × $12.00 × 8 × 2 = $1,728 (8) 9 × $13.00 × 8 × 3 = $2,808 $4,536 (7) 9 × $13.00 × 8 × 9 = $8,424 (7) (9) 9 × $13.00 × 8 × 5 = $4,680 $13,104 2012 2013 Jan. 1 balance $0 $0 $8,640 $1,728 Plus accrued 8,640 5,184 9,360 5,616 Less paid 0 (3,456) (7,776) (4,536) Dec. 31 balance $8,640 $1,728 $10,224 $2,808 (1) (2) (3) (4) employees per hour hours per day days (1) 9 × $12.00 × 8 × 10 = $8,640 (2) 9 × $12.00 × 8 × 2 = $1,728 (3) 9 × $12.00 × 8 × 1 = $864 9 × $13.00 × 8 × 10 = $9,360 $10,224 (4) 9 × $13.00 × 8 × 3 = $2,808 Intermediate Accounting , 14 th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse E13-5 (Compensated Absences) Matthewson Company began operations on January 2, 2012. It employs 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 Matthewson 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. (a)(1) Prepare journal entries to record transactions related to compensated absences during 2012. (a)(2) Prepare journal entries to record transactions related to compensated absences during 2013. NOTE: Vacation days and sick days are paid at the employee’s current wage. Also, if employees earn vacation pay at different pay rates, a consistent pattern of recognition (e.g., first-in, first-out) could be employed which liabilities have been paid. (b) Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2012, and 2013. Vacation Wages Payable Sick Pay Wages Payable Vacation Wages Payable Sick Pay Wages Payable
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44dfbef45d4d29eed28ef53a63fd71480d3d113d.xlsx, Exercise 13-5, Page 4 of 10, 03/29/2012, 01:32:29 Name: Date: Instructor: Course: 9 individuals who work 8 -hour days and are paid hourly. Each employee earns 10 paid vacation days and 6 paid sick days 2012 2013 2012 2013 2012 2013 $12 $13 0 9 4 5 Instructions: 2012 To accrue expense and liability for vacations Salaries and Wages Expense Formula Salaries and Wages Payable Formula (1) 2012 To accrue expense and liability for sick pay Salaries and Wages Expense Formula Salaries and Wages Payable Formula (2) 2012 To record sick leave paid Salaries and Wages Payable Amount (3)
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