Exercise 13-11 Marigold Limited began operations on January 2, 2016. The company employs 15 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: Vacation Days Used by Each Employee Actual Hourly Sick Days Used Wage Rate 2016 2017 2016 $21 $230 Each Employee 2017 2016 2017 4 Marigold Limited has chosen to accrue the cost of compensated absences at rates of pay in effect during the period when they are earned and to accrue sick pay when it is earned. For the purpose of this question, ignore any tax, CPP, and EI deductions when making payments to the employees. Prepare the journal entries to record the transactions related to vacation entitlement during 2016 and 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts) Date Account Titles and Explanation 2016 Debit Credit (To accrue the vacation pay entitlement earned by the employees) 2017 (To accrue the vacation pay entitlement earned by the employees) 2017 (To record payment for vacation time) Prepare the journal entries to record the transactions related to sick days during 2016 and 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation 2016 Debit Credit (To accrue the expense and liability for sick days) 2016 (To record payment for compensated time) 2017 To accrue the expense and liability for sick days) 2017 To record payment for compensated time when used by employees) Calculate the amounts of any liability for vacation pay and sick days that should be reported on the statement of financial position at December 31, 2016, and 2017 2016 17 Liability for vacation pay Liability for sick pay Prepare the journal entries to record the transactions related to sick days during 2016 and 2017 assuming the entitlement to sick days did not accumulate. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit 2016 (To record payment for compensated time when used by employees) 2017 (To record payment for compensated time when used by employees) Calculate the amounts of any liability for vacation pay and sick days that should be reported on the statement of financial position at December 31, 2016, and 2017 assuming the entitlement to sick days did not accumulate 2016 2017 Liability for vacation pays Liability for sick payS
