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A business provides its employees with varying amounts of vacation per year, depending on the length of employment. The estimated amount of the current years

A business provides its employees with varying amounts of vacation per year, depending on the length of employment. The estimated amount of the current years vacation pay is $60,000.

Required:
a. Journalize the adjusting entry required on January 31, the end of the first month of the current year, to record the accrued vacation pay. Refer to the Chart of Accounts for exact wording of account titles.

b. How is the vacation pay reported on the companys balance sheet? When is this amount removed from the companys balance sheet?

CHART OF ACCOUNTS
General Ledger
ASSETS
110 Cash
111 Accounts Receivable
112 Interest Receivable
113 Notes Receivable
115 Inventory
116 Supplies
118 Prepaid Insurance
120 Land
123 Building
124 Accumulated Depreciation-Building
125 Office Equipment
126 Accumulated Depreciation-Office Equipment
LIABILITIES
210 Accounts Payable
213 Interest Payable
214 Notes Payable
215 Salaries Payable
216 Social Security Tax Payable
217 Medicare Tax Payable
218 Employees Federal Income Tax Payable
219 Employees State Income Tax Payable
221 Retirement Savings Deductions Payable
224 Federal Unemployment Tax Payable
225 State Unemployment Tax Payable
226 Vacation Pay Payable
227 Unfunded Pension Liability
228 Product Warranty Payable
EQUITY
310 Common Stock
311 Retained Earnings
312 Dividends
313

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