Acc422 Intermediate Accounting
E13-6 Compensated Absences
Assume the facts in the preceding exercise, except that Matt Broderick Company has chosen not to accrue paid sick leave until used, and has chosen to accrue vacation time at expected future rates of pay without discounting. The company used the following projected rates to accrue vacation time
Year in Which Vacation Time Was Earned Projected Future Pay Rates Used to Accrue Vacation Pay
2013 $10.75
2014 $11.60
Instructions:
(1) Prepare journal entries to record transactions related to compensated absences during 2013 and 2014.
(2) Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2013, and 2014.
