Simson Company has 35 employees who work 8-hour days and are paid hourly. On January 1, 2006, the company began a program of granting its employees 10 days of paid vacation each year. Vacation days earned in 2006 may first be taken on January 1, 2007. Information relative to these employees is as follows:

Hourly Vacation Days Earned Vacation Days Used

Year Wages by Each Employee by Each Employee

2006 $25.80 10 0

2007 27.00 10 8

2008 28.50 10 10

Simson has chosen to accrue the liability for compensated absences at the current rates of pay in effect when the compensated time is earned.

77. What is the amount of expense relative to compensated absences that should be reported on Simsons income statement for 2006?

a. $0.

b. $68,880.

c. $75,600.

d. $72,240.

78. What is the amount of the accrued liability for compensated absences that should be reported at December 31, 2008?

a. $94,920.

b. $90,720.

c. $79,800.

d. $95,760.