Refer to the data in E13-9 and assume instead that Mustafa Limited has chosen not to recognize

Question:

Refer to the data in E13-9 and assume instead that Mustafa Limited has chosen not to recognize paid sick leave until it is used, and has chosen to accrue vacation time at expected future rates of pay without discounting. The company uses the following projected rates to accrue vacation time:

Instructions
(a) Prepare the journal entry(ies) to record the transactions related to vacation entitlement during 2010 and 2011.
(b) Prepare the journal entry(ies) to record the transactions related to sick days during 2010 and 2011.
(c) Calculate the amounts of any liability for vacation pay and sick days that should be reported on the balance sheet at December 31, 2010 and 2011.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...