Assume the facts in E13.3 except that Broderick Company has chosen not to accrue paid sick leave

Question:

Assume the facts in E13.3 except that Broderick 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       Projected Future Pay Rates
    Time Was Earned           Used to Accrue Vacation Pay

2019................................................................................$10.75
2020..................................................................................11.60


Instructions

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.

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...
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Intermediate Accounting

ISBN: 978-1119503668

17th edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfiel

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