Calculate the amount of liability

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Question - ABC Co. has 20 employees and each one is entitled to 30 days of annual paid vacation leave. Unconsumed leave of up to 5 days per year can be carried forward to the next year. The annual leave brought forward must be consumed in the next year. However, in each year the employee can only enjoy the current year's entitlement before taking the annual leave brought forward. In 2015, the average unused leave is 5 days per employee and from past experience only 15 employees will take 35 days of leave each and the rest will take 30 days each. Assume that each employee earns $120 per day.

Calculate the amount of liability at the end of 2015.

Reference no: EM132065284

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