Question
Morgan Company determined that (1) it has a material obligation relating to employees' ... relating to employees' rights to receive compensation for future absences attributable
Morgan Company determined that (1) it has a material obligation relating to employees' ... relating to employees' rights to receive compensation for future absences attributable toemployees' services already rendered, (2) the obligation relates to rights that vest, and (3) payment of the compensation in probable. The amount of Morgan's obligation as of December 31, year 1 is reasonably estimated for the following employee benefits:
Vacation pay $100,000
Holiday pay $25,000
What total amount should Morgan report as its liability for compensated absences in its December 31, year 1 balance sheet?
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