AC 302 CHAPTER 13 QUESTION 5

AC 302 CHAPTER 13 QUESTION 5
Name				Date					
Instructor				Course					
Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield										
Primer on Using Excel in Accounting by Rex A Schildhouse										
										
E13-5 (Compensated Absences) Matthewson Company began operations on January 2, 2012. It employs								9 	individuals who work	
8 	-hour days and are paid hourly. Each employee earns				10 	paid vacation days and		6 	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
Wage Rate"		"Vacation Days Used
by Each Employee"		"Sick Days Used
by Each Employee"				
		2012	2013	2012	2013	2012	2013			
		$12 	$13 	0 	9 	4 	5 			
Matthewson 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.										
										
										
Instructions:										
(a)(1) Prepare journal entries to record transactions related to compensated absences during 2012.										
										
		2012	To accrue expense and liability for vacations							
			Salaries and Wages Expense			Formula				
			Salaries and Wages Payable				Formula	(1)		
										
		2012	To accrue expense and liability for sick pay							
			Salaries and Wages Expense			Formula				
			Salaries and Wages Payable				Formula	(2)		
										
		2012	To record sick leave paid							
			Salaries and Wages Payable			Amount		(3)		
			Account title				Amount			
										
(a)(2) Prepare journal entries to record transactions related to compensated absences during 2013.										
										
		2013	To accrue the expense and liability for vacations							
			Salaries and Wages Expense			Formula				
			Salaries and Wages Payable				Amount	(4)		
										
		2013	To accrue the expense and liability for sick pay							
			Salaries and Wages Expense			Formula				
			Salaries and Wages Payable				Formula	(5)		
										
		2013	To record vacation time paid							
			Salaries and Wages Expense			#VALUE!				
			Salaries and Wages Payable			Amount		(6)		
			Account title				Formula	(8)		
										
		2013	To record sick leave paid							
			Salaries and Wages Expense			#VALUE!				
			Salaries and Wages Payable			Formula		(6)		
			Account title				Formula	(8)		
										
	employees		per hour		hours per day		days			
(1)	Number	×	Amount	×	Number	×	Number	=	Formula	(1)
(2)	Number	×	Amount	×	Number	×	Number	=	Formula	(2)
(3)	Number	×	Amount	×	Number	×	Number	=	Formula	(3)
(4)	Number	×	Amount	×	Number	×	Number	=	Formula	(4)
(5)	Number	×	Amount	×	Number	×	Number	=	Formula	(5)
(6)	Number	×	Amount	×	Number	×	Number	=	Formula	(6)
	Number	×	Amount	×	Number	×	Number	=	Formula	
(8)	Number	×	Amount	×	Number	×	Number	=	Formula	Formula
(7)	Number	×	Amount	×	Number	×	Number	=	Formula	(7)
(9)	Number	×	Amount	×	Number	×	Number	=	Formula	Formula
NOTE: Vacation days and sick days are paid at the employee- current wage. Also, if employees earn vacation pay at different pay rates, a consistent pattern of recognition (e.g., first-in, first-out) could be employed which liabilities have been paid.										
										
(b) Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2012, and 2013.										
										
				2012			2013			
				"Vacation
Wages
Payable"	"Sick Pay
Wages
Payable"		"Vacation
Wages
Payable"	"Sick Pay
Wages
Payable"		
										
										
Jan. 1 balance				Amount	Amount		Formula	Formula		
Plus accrued				Amount	Amount		Amount	Amount		
Less paid				Amount	Amount		Amount	Amount		
Dec. 31 balance				Formula	Formula		Formula	Formula		
				(1)	(2)		(3)	(4)		
										
	employees		per hour		hours per day		days			
(1)	Number	×	Amount	×	Number	×	Number	=	Formula	
(2)	Number	×	Amount	×	Number	×	Number	=	Formula	
										
(3)	Number	×	Amount	×	Number	×	Number	=	Formula	
	Number	×	Amount	×	Number	×	Number	=	Formula	Formula
										
(4)	Number	×	Amount	×	Number	×	Number	=	Formula