In: Accounting
Sheffield Company began operations on January 2, 2019. It
employs 9 individuals who work 8-hour days and are paid hourly.
Each employee earns 9 paid vacation days and 7 paid sick days
annually. Vacation days may be taken after January 15 of the year
following the year in which they are earned. Sick days may be taken
as soon as they are earned; unused sick days accumulate. Additional
information is as follows.
Actual Hourly |
Vacation Days Used |
Sick Days Used |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
2019 |
2020 |
2019 |
2020 |
2019 |
2020 |
|||||||
$6 | $7 | 0 | 8 | 5 | 6 |
Sheffield Company has chosen to accrue the cost of compensated
absences at rates of pay in effect during the period when earned
and to accrue sick pay when earned.
1. Prepare journal entries to record transactions related to compensated absences during 2019 and 2020. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date |
Account Titles and Explanation |
Debit |
Credit |
---|---|---|---|
2019 |
enter an account title to accrue the expense and liability for vacations |
enter a debit amount |
enter a credit amount |
enter an account title to accrue the expense and liability for vacations |
enter a debit amount |
enter a credit amount |
|
(To accrue the expense and liability for vacations) |
|||
enter an account title to accrue the expense and liability for sick pay |
enter a debit amount |
enter a credit amount |
|
enter an account title to accrue the expense and liability for sick pay |
enter a debit amount |
enter a credit amount |
|
(To accrue the expense and liability for sick pay) |
|||
enter an account title to record payment for compensated time when used by employees |
enter a debit amount |
enter a credit amount |
|
enter an account title to record payment for compensated time when used by employees |
enter a debit amount |
enter a credit amount |
|
(To record payment for compensated time when used by employees) |
|||
2020 |
enter an account title to accrue the expense and liability for vacations |
enter a debit amount |
enter a credit amount |
enter an account title to accrue the expense and liability for vacations |
enter a debit amount |
enter a credit amount |
|
(To accrue the expense and liability for vacations) |
|||
enter an account title to accrue the expense and liability for sick pay |
enter a debit amount |
enter a credit amount |
|
enter an account title to accrue the expense and liability for sick pay |
enter a debit amount |
enter a credit amount |
|
(To accrue the expense and liability for sick pay) |
|||
enter an account title to record vacation time paid |
enter a debit amount |
enter a credit amount |
|
enter an account title to record vacation time paid |
enter a debit amount |
enter a credit amount |
|
enter an account title to record vacation time paid |
enter a debit amount |
enter a credit amount |
|
(To record vacation time paid) |
|||
enter an account title to record sick leave paid |
enter a debit amount |
enter a credit amount |
|
enter an account title to record sick leave paid |
enter a debit amount |
enter a credit amount |
|
enter an account title to record sick leave paid |
enter a debit amount |
enter a credit amount |
|
(To record sick leave paid) |
2. Compute the amounts of any liability for compensated absences
that should be reported on the balance sheet at December 31, 2019
and 2020.
2019 |
2020 |
|||
---|---|---|---|---|
Vacation Wages Payable |
$enter a dollar amount | $enter a dollar amount | ||
Sick Pay Wages Payable |
$enter a dollar amount | $enter a dollar amount |
PLEASE PROVIDE STEPS AND EXPLANATION WITH ANSWERS. THANK YOU!