Stiner Company has 20 employees who work 8-hour days and are paid hourly. On January 1, 2010, the company began a program of granting its employees 10 days' paid vacation each year. Vacation days earned in 2010 may first be taken on January 1, 2011. Information relative to these employees is as follows: Hourly Vacation Days Earned Vacation Days Used Year Wages by Each Employee by Each Employee 2010 $12.90 10 0 2011 13.50 10 6 2012 14.20 10 12

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

What is the amount of the accrued liability for compensated absences that should be reported at December 31, 2010, December 31, 2011, and December 31, 2012?

What is the amount of the expense for compensated absences that should be reported for 2010, 2011 and 2012?

Prepare journal entries for 2012