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Windsor Company began operations on January 2, 2019. It employs 11 individuals who work 8-hour days and are paid hourly. Each employee earns 12 paid

Windsor Company began operations on January 2, 2019. It employs 11 individuals who work 8-hour days and are paid hourly. Each employee earns 12 paid vacation days and 7 paid sick days annually. Vacation days may be taken after January 15 of the year following the year in which they are earned. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional information is as follows.

Actual Hourly Wage Rate

Vacation Days Used by Each Employee

Sick Days Used by Each Employee

2019

2020

2019

2020

2019

2020

$ 12 $ 13 0 11 5 6

Windsor Company has chosen not to accrue paid sick leave until used, and has chosen to accrue vacation time at expected future rates of pay without discounting. The company used the following projected rates to accrue vacation time.

Year in Which Vacation Time Was Earned

Projected Future Pay Rates Used to Accrue Vacation Pay

2019 $ 12.90
2020 13.92

a) Prepare journal entries to record transactions related to compensated absences during 2019 and 2020. b) Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2019, and 2020.

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