On January 1, 2019, Baker Co. decided to grant its employees 10 vacation days and five sick days each year. Vacation days earned can be carried over to the next year but not sick days. Each employee took an average of three sick days in 2019. During 2019, each of Baker's six employees earned P100 per day and earned 10 vacation days. These vacation days were taken during 2020. What amount should Baker report for compensated absence expense for the year ended December 31, 2019? a. 0 b. 6,000 c. 7,800 d. 9,000
On January 1, 2019, Baker Co. decided to grant its employees 10 vacation days and five sick days each year. Vacation days earned can be carried over to the next year but not sick days. Each employee took an average of three sick days in 2019. During 2019, each of Baker's six employees earned P100 per day and earned 10 vacation days. These vacation days were taken during 2020. What amount should Baker report for compensated absence expense for the year ended December 31, 2019? a. 0 b. 6,000 c. 7,800 d. 9,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 6MC
Related questions
Question
Transcribed Image Text:4.
On January 1, 2019, Baker Co. decided to grant its employees 10 vacation days and five sick days
each year. Vacation days earned can be carried over to the next year but not sick days. Each
employee took an average of three sick days in 2019. During 2019, each of Baker's six
employees earned P100 per day and earned 10 vacation days. These vacation days were taken
during 2020. What amount should Baker report for compensated absence expense for the year
ended December 31, 2019?
a. 0
b. 6,000
c. 7,800
d. 9,000
5. North Corp. has an employee benefit plan for compensated absences that gives employees 10
paid vacation days and 10 paid sick days. Both vacation and sick days can be carried over
indefinitely. Employees can elect to receive payment in lieu of vacation days; however, no
payment is given for sick days not taken. At December 31, 2019, North's unadjusted balance of
liability for compensated absences was P21,000. North estimated that there were 150 vacation
days and 75 sick days available at December 31, 2019. North's employees earn an average of
P100per day. In its December 31, 2019, balance sheet, what amount of liability for compensated
absences is North required to report?
а. 36,000
b. 22,500
с. 21,000
d. 15,000
6. Northwest Company determined tha5t it has an obligation relating to employees' rights to
receive compensation for future absences attributable to employees' services already rendered.
The obligation relates to rights that vest, and payment of the compensation is probable. The
amounts of Northwest's obligations as of December 31 are reasonably estimated as follows:
Vacation pay
P110,000
Sick pay
80,000
In its December 31 balance sheet, what amount should Northwest report as its liability for
compensated absences?
а.
b. 80,000
с. 110,000
d. 190,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
