Compensated Absences. Data: Poplar Fabrication grants its employees 2 weeks vacation each year. Unused are taken the next year. In 2024 there were700 weeks of unused vacation. The employees earned an average wage of $900 per week.  In 2025 the 700 weeks were taken with a 5 Percent wage increase. Required: 1. Prepare the Journal entry for vacation weeks earned, but not taken in 2024. Prepare the journal entry for the vacation weeks taken in 2025. ( hint 5% raise)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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 Compensated Absences. Data: Poplar Fabrication grants its employees 2 weeks vacation each year. Unused are taken the next year. In 2024 there were700 weeks of unused vacation. The employees earned an average wage of $900 per week.  In 2025 the 700 weeks were taken with a 5 Percent wage increase.

Required: 1. Prepare the Journal entry for vacation weeks earned, but not taken in 2024.

  1. Prepare the journal entry for the vacation weeks taken in 2025. ( hint 5% raise)
Expert Solution
Step 1: Calculation of wages expenses

polar fabrications permit vacation for the year :

The employees earned an average wage  = $900 per week

Unused vacations                                     = 700 week 


Wages  expenses = 900 *700 = $ 630,000

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