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

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.

Actual Hourly Wage Rate 2010 2011 $10 $11 Vacation Days Used by Each Employee 2010 2011 Sick Days Used by Each Employee 2010 2011 0 4

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a 2010 To accrue the expense and liability for vacations Wages Expense 7740 1 Vacation Wages Payable ... View full answer

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