ACC Tax ch 13 Robinson Chemicals has 800 employees Each empl

ACC Tax ch 13

Robinson Chemicals has 800 employees. Each employee earns two weeks of paid vacation per year. Vacation time not taken in the year earned can be carried over to subsequent years. During 2016, 200 employees took both weeks’ vacation, but at the end of the year, 600 employees had vacation time carryovers as follows:

Employees

Vacation weeks

earned but not taken

200

0

350

1

250

2

800

During 2016, compensation averaged $587 a week per employee.

The salaries and wages expense to be accrued on December 31 for employees that earned but have not taken their vacation will be $_______________

Solution

Solution:

Average compensaton per employee = $587 per week

Nos of employees not taken 1 vaction week = 350

Nos of employee not takne 2 vacation week = 250

Total vacation week earned but not taken = (250*2) + 350 = 850 Week

Salaries and wages expensed accured for employees that earned but have not taken their vacation = 587 * 850 = $498,950