How much should anomalous accrue as liability

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Reference no: EM132809817

ANOMALOUS IRREGULAR Co. grants its employees twelve days paid vacation leave each year. Per ANOMALOUS's policy, employees are required to take vacation leave each year, but not necessarily for their entire vacation leave entitlement. Vacation leaves not taken during a year can be carried over indefinitely.

ADHERE has 500 employees with an average salary of ?4,000 per day. The average annual pay increase is 5%. During 20x1, total vacation leaves taken by employees were 5,400 days. Based on past experience, 90% of unused vacation leave for a year are taken in the immediately following year.

Problem 1: If unused vacation leaves vest, how much should ANOMALOUS accrue as liability for unused vacation leave on December 31, 20x1?

a. 2,520,000

b. 25,200,000

c. 2,268,000

d. 0

Reference no: EM132809817

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