Question
The city of Phoenix, Arizona uses a June 30th year-end. On March 1, the city hired Jeff Swan as its city manager at an annual
The city of Phoenix, Arizona uses a June 30th year-end. On March 1, the city hired Jeff Swan as its city manager at an annual salary of $110,000. Jeff will earns 12 vacation days per year for the first 10 years with the city. He will earns 18 vacation days per year after 10 years of employment, like all other employees.
Employees who leave the city receive payment for all vested, unused vacation days. However, all employees must work for at least six months before they can take any vacation days. The city believes that Jeff will be an excellent employee and assumes that he will work past the required six months.
Action Items
- Review the scenario.
- Use the GARS to determine if the city should accrue vacation time for an employee who has not yet vested the necessary time to earn vacation time.
- Access the GASB website. Click on Standards & Guidance > GARS. Click on Access and accept the license agreement. (The GARS is now freely available to all users.)
- Perform a key word search (suggested key words are "vacation leave and other compensated absences with similar characteristics.")
- Review the GASB Cod. Sec. that applies to this scenario.
- Develop an accounting research memo that answers, should the city accrue vacation time for the city manager? Make sure to include specific codification references that support your conclusion.
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