Mathewson Company began operations on January 2, 2010. Itemploys 20 individuals

Question

Mathewson Company began operations on January 2, 2010. Itemploys 20 individuals who work 8-hour days and are paid hourly.Each employee earns 22 paid vacation days and 13 paid sick daysannually. Vacation days may be taken after January 15 of the yearfollowing the year in which they are earned. Sick days may be takenas soon as they are earned; unused sick days accumulate. Additionalinformation is as follows.

WageRate

by EachEmployee

by EachEmployee

Mathewson Company has chosen not to accrue paid sick leave untilused, and has chosen to accrue vacation time at expected futurerates of pay without discounting. The company used the followingprojected rates to accrue vacation time.

Years inWhich Vacation Time Was Earned

ProjectedFuture Pay Rates Used to Accrue Vacation Pay

Actual Hourly Vacation Days Used Sick Days Used

WageRate

by EachEmployee

by EachEmployee

2010 2011 2010 2011 2010 2011 $26 $30 0 20 9 11

Explanation / Answer

December31, 2010 Liabilities Vacation WagesPayable 4,928 December 31,2011 Liabilities Vacation WagesPayable 128

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