Question
Silver Ltd. has 35 employees who work 8-hour days and are paid hourly. On January 1, 20x7, the company began a program of granting its
Silver Ltd. has 35 employees who work 8-hour days and are paid hourly. On January 1, 20x7, the company began a program of granting its employees 10 days paid vacation each year. Vacation days earned in 20x7 may be taken starting on January 1, 20x8. Information relative to these employees is as follows:
HourlyVacation Days EarnedVacation Days Used
YearWagesby Each Employeeby Each Employee
20x7$12.6100
20x813.4106
20x914.31010
Silver has chosen to accrue the liability for compensated absences (vacation pay) at the current rates of pay in effect when the vacation pay is earned.
What is the amount of vacation pay expense that should be reported on Silver's income statement for 20x7?
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