Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pronghorn Limited began operations on January 2, 2019. The company employs 9 individuals who work 8 hour days and are paid hourly. Each employee earns

Pronghorn Limited began operations on January 2, 2019. The company employs 9 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: Actual Hourly Wage Rate Vacation Days Used by Each Employee Sick Days Used by Each Employee 2019 2020 2019 2020 2019 2020 $20 $22 0 7 4 5 Assume that Pronghorn Limited has chosen not to recognize paid sick leave until it is used, and has chosen to accrue vacation time at expected future rates of pay without discounting. Pronghorn uses the following projected rates to accrue vacation time: Year in Which Vacation Time Was Earned 2019 2020 Projected Future Pay Rates Used to Accrue Vacation Pay $20.75 per hour $22.60 per hour Prepare the journal entries to record the transactions related to vacation entitlement during 2019 and 2020. (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 Debit Credit 2019 Salaries and Wages Expense 2019 Salaries and Wages Payable (To accrue the expense and liability for vacations) No Entry No Entry (To record vacation time paid) 2020 Salaries and Wages Expense 2020 Salaries and Wages Payable (To accrue the expense and liability for vacations) Salaries and Wages Expense Salaries and Wages Payable Cash (To record vacation time paid) 0 0 Prepare the journal entries to record the transactions related to sick days during 2019 and 2020. (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 Debit Credit 2019 Salaries and Wages Expense 2020 Cash Salaries and Wages Expense Cash eTextbook and Media List of Accounts Calculate the amounts of any liability for vacation pay and sick days that should be reported on the SFP at December 31, 2019, and 2020. Liability for vacation pay Liability for sick pay LA $ 1A 2019 eTextbook and Media List of Accounts 14 1A 2020

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting Working Papers

Authors: John G. Helmkamp

2nd Edition

0471514292, 978-0471514299

More Books

Students also viewed these Accounting questions

Question

Propose an estimator of var b0 k . Does an unbiased version exist?

Answered: 1 week ago