Bristol Stamping Company provides its 100 employees with a comprehensive benefits package. As part of this package, Bristol allows each of its 100 employees 12 paid sick days per year. The average wage rate for the current year is $ 140 per day. If employees do not take the sick days in the current year, the days carry over indefinitely and will be paid to the employee upon termination. Employees took 60% of the days during the current year and carried over the remaining sick days to the next year.
Required
a. Prepare the journal entry required to record the sick days for the current year.
b. Prepare the journal entry required to record the payment of the sick days in the following year, assuming employees take all remaining days at that time.
c. Independent of your answers to parts (a) and (b), prepare the journal entry to record the sick days taken in the next year, assuming that the wage rate increased to $ 147 per day. Employees take all remaining days at that time.