Answer:
Given that,
Number of employees who work for 8-hours a day = 15
Annual paid leaves for each employee = 10
Average hourly wage rate(2017) = $24.00
Average hourly wage rate(2018) = $25.50
Average vacation days used by each employee in 2018 = 9
Therefore, the Journal entries are as follows:
(1) On 2017,
Wages expense A/c Dr. $28,800
To vacation wages payable $28,800
( 15 × 8 hrs × 10 days × 24)
(vacation wages)
(2) On 2018,
Wages expense A/c Dr. $1,620
Vacation wages payable(15 × 8 hrs × 9 days × 24) Dr. $25,920
To cash ( 15 × 8 hrs × 9 days × 25.50) $27,540
(cash paid for vacation wages)
(3) On 2018,
Wages expense A/c Dr. $30,600
To vacation wages payable $30,600
( 15 × 8 hrs × 10 days × 25.50)
(vacation wages due in 2018)
