Aloha Company has a personnel policy that allows each employee with at least one year's employment 20 days vacation time and two holidays with regular pay. Unused days are carried over to the next year. If not taken during the next year, the vacation and holiday times are lost. Aloha's accounting period ends December 31.
At the end of 1999, the personnel records showed the following:

During 2000, all of the 1999 vacation time and eight days of the holiday time, which were carried over, were taken. Salary increases in 2000 for these employees relating to the days carried over amounted to $1,600. Total cash wages paid: 1999, $1,780,000; 2000, $1,860,000.
Required:
1. Give all of the entries for Aloha Company related to vacations and holidays during 1999 and 2000. Disregard payroll taxes.
2. Show how the effects of the above transactions should be reported on the 1999 and 2000 financial statements of Aloha.

Transcribed Image Text:

Vacations Carried over to 2000 Total Days Total Salaries Holidays Carried over to 2000 Total Days Total Salaries $16,800 $2,580 70 10