Assume the facts in the preceding exercise, except that Zero Mostel Company has chosen not to accrue

Question:

Assume the facts in the preceding exercise, except that Zero Mostel Company has chosen not to accrue paid sick leave until used, and has chosen to accrue vacation time at expected future rates of pay without discounting. The company used the following projected rates to accrue vacation time.

Instructions
(a) Prepare journal entries to record transactions related to compensated absences during 2008 and 2009.
(b) Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2008, and2009.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...