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lululene
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| Posted: 13 Apr 2010 at 14:12 | IP Logged
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Friday. The last payroll recorded for the year ended December 31, Year 2, was for the week ended December 25, Year 2. The payroll for the week ended January 1, Year 3, included regular weekly salaries of $80,000 and vacation pay of $25,000 for vacation time earned in year 2 not taken by December 31, Year 2. Ross had accrued a liability of $20,000 for vacation pay at December 31, Year 1. In its December 31, Year 2, balance sheet, what amount should Ross report as accrued salary and vacation pay?
n mlkj $64,000
n mlkj $68,000
n mlkj $69,000
n mlkj $89,000
D
Explanation:
Accrued salary, 12/31 year 2 ($80,000 x 4/5*) 64,000
Accrued vacation time earned in year 2 ; ; 25,000
Accrued salary and vacation time, 12/31 year 2 89,000
My questions is what happened to the $20,000 vacation pay arrued in 2001?
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gottobecpa
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| Posted: 13 Apr 2010 at 15:55 | IP Logged
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its assumed that it was paid in 2002
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cflas08
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| Posted: 13 Apr 2010 at 16:24 | IP Logged
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lululene wrote:
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Friday. The last payroll recorded for the year ended December 31, Year 2, was for the week ended December 25, Year 2. The payroll for the week ended January 1, Year 3, included regular weekly salaries of $80,000 and vacation pay of $25,000 for vacation time earned in year 2 not taken by December 31, Year 2. Ross had accrued a liability of $20,000 for vacation pay at December 31, Year 1. In its December 31, Year 2, balance sheet, what amount should Ross report as accrued salary and vacation pay?
n mlkj $64,000
n mlkj $68,000
n mlkj $69,000
n mlkj $89,000
D
Explanation:
Accrued salary, 12/31 year 2 ($80,000 x 4/5*) 64,000
Accrued vacation time earned in year 2 ; ; ; ; 25,000
Accrued salary and vacation time, 12/31 year 2 89,000
My questions is what happened to the $20,000 vacation pay arrued in 2001?
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I agree with gottabecpa. They told you the $25,000 was not taken so with that tidbit of information, one can assume that the $20,000 was taken since the question didn't say it wasn't taken.
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lululene
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| Posted: 13 Apr 2010 at 16:39 | IP Logged
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Thanks, you all.
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cpa_guy
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| Posted: 13 Apr 2010 at 19:25 | IP Logged
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lululene wrote:
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Friday. The last payroll recorded for the year ended December 31, Year 2, was for the week ended December 25, Year 2. The payroll for the week ended January 1, Year 3, included regular weekly salaries of $80,000 and vacation pay of $25,000 for vacation time earned in year 2 not taken by December 31, Year 2. Ross had accrued a liability of $20,000 for vacation pay at December 31, Year 1. In its December 31, Year 2, balance sheet, what amount should Ross report as accrued salary and vacation pay?
n mlkj $64,000
n mlkj $68,000
n mlkj $69,000
n mlkj $89,000
D
Explanation:
Accrued salary, 12/31 year 2 ($80,000 x 4/5*) 64,000
Accrued vacation time earned in year 2 ; ; ; ; 25,000
Accrued salary and vacation time, 12/31 year 2 89,000
My questions is what happened to the $20,000 vacation pay arrued in 2001?
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The 20K from Yr 1 is a distractor. Accrual entries are reversing.
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Topic: Current Liability - Payroll
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