Assume the facts as in E13-6 except that Matthewson Company has chosen (1) not to accrue paid sick leave until used and (2) to accrue vacation time at expected future rates of pay without discounting. The company used the following projected rates to accrue vacation time.

Instructions

(a) Prepare journal entries to record transactions related to compensated absences during 2014 and 2015.

(b) Compute the amounts of any liability for compensated absences that should be reported on the statement of financial position at December 31, 2014, and 2015.

Transcribed Image Text:

Year in Which Vacation Time Was Earned 2014 2015 Projected Future Pay Rates Used to Accrue Vacation Pay 12.90 13.70