What is amount of expense relative to compensated absences

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Question - Payroll

Leblanc's Hardware Company has 35 employees who work 8-hour days and are paid hourly. On January 1, 2014, the company began a program of granting its employees 10 days of paid vacation each year. Vacation days earned in 2014 may first be taken on January 1, 2015. Information relative to these employees is as follows:

Year

Hourly Wages

Vacation Days Earned by each Employee

Vacation Days Used by Each Employee

2014

$21.50

10

0

2015

22.50

10

8

2016

23.75

10

10

Vargas has chosen to accrue the liability for compensated absences at the current rates of pay in effect when the compensated time is earned.

1) What is the amount of expense relative to compensated absences that should be reported on Vargas's income statement for 2014?

2) What is the amount of the accrued liability for compensated absences that should be reported at December 31, 2016?

Reference no: EM132005372

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