Use the same information as in E13.6, except that Matthewson SA has chosen 

(1) Not to accrue paid sick leave until used 

(2) 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
2021	€12.90
2022	13.70

Instructions

a. Prepare journal entries to record transactions related to compensated absences during 2021 and 2022.

b. Compute the amounts of any liability for compensated absences that should be reported on the statement of financial position at December 31, 2021, and 2022.

E13.6

Matthewson SA began operations on January 2, 2021. It employs 9 individuals who work 8-hour days and are paid hourly. Each employee earns 10 paid vacation days and 6 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.

Transcribed Image Text:

Actual Hourly Vacation Days Used Sick Days Used Wage Rate by Each Employee by Each Employee 2021 2022 2021 2022 2021 2022 €12 €13 9 4