Reference no: EM133147716

Question - Vanessa Company has 35 employees who work 8 hours a day ad is paid hourly. On January 1, 2019, the entity began a program of granting the employees 10 days of paid vacation each year. Vacation days earned in 2019 may first be taken on January 1, 2020. The entity has chosen to accrue the liability for compensated absences at the current rate of pay in effect when the compensated time is earned.

1. What amount should be reported as vacation pay expense for 2019?

2. What amount should be reported as accrued liability on December 31, 2021?

3. What amount should be reported as accrued liability on December 31, 2021 assuming the policy is to accrue liability at the end of each year at the wage rate for that year?