Refer to the data in E13-11 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. Mustafa uses the following projected rates to accrue vacation time:

Year in which vacation time was earned.............. Projected Future Pay Rates Used to Accrue Vacation Pay

                        2016.......................................................................................$20.75 per hour

                        2017.......................................................................................$21.60 per hour

Requirements:

1) Prepare the journal entry(ies) to record the transactions related to vacation entitlement during 2016 and 2017.

2) Prepare the journal entry(ies) to record the transactions related to sick days during 2016 and 2017. Year-end amortization

3) Calculate the amounts of any liability for vacation pay and sick days that should be reported on the  statement of financial position at December 31, 2016 and 2017.

Accrued liability at year-end (vacation pay only):