Reference no: EM132540086

Questions -

Q1) A company gives each of its 50 employees (assume they were all employed continuously through 2018 and 2019) 12 days of vacation a year if they are employed at the end of the year. The vacation accumulates and may be taken starting January 1 of the next year. The employees work 8 hours per day. In 2018, they made $17.50 per hour and in 2019 they made $20 per hour. During 2019, they took an average of 9 days of vacation each. The company's policy is to record the liability existing at the end of each year at the wage rate for that year. Under U.S. GAAP, what amount of vacation liability would be reflected on the 2018 and 2019 balance sheets, respectively?

A) $84,000; $117,000

B) $96,000; $108,000

C) $84,000; $24,000

D) $96,000; $24,000

Q2) Bull's Eye Department Stores, Inc. records $170,000 in gift card sales and receives cash in year 1. Customers redeemed 25% of the gift cards to purchase merchandise in year 1. The company estimates breakage as 13% and uses the proportional method. How much breakage revenue should be recorded at the end of year 1? (Round any intermediary percentages two decimal places, X.XX%. Round your final answer to the nearest dollar.)

A) $22,100

B) $42,500

C) $5,525

D) $6,352