Vargas Company has 35 employees who work 8-hour days and are paid hourly. On January 1, 2019, the company began a program of granting its employees 10 days of paid vacation each year. Vacation days earned in 2019 may first be taken on January 1, 2020. Any days not taken in one year can be carried forward for up to two years. Information relative to these employees is as follows: (5 points)

Hourly Vacation Days Earned Vacation Days Used

Year Wages by Each Employee by Each Employee

2019 $11.50 10 0

2020 12.50 10 8

1 a. What is the amount of expense relative to compensated absences that should be reported on Vargass income statement for 2019? (To receive credit for your answer, you must show all supporting computations.)

1 b. What is the amount of the accrued liability for compensated absences that should be reported at December 31, 2020? (To receive credit for your answer, you must show all supporting computations.)