Rexallo Company begins business on January 2 2016 with

15 #2484
Rexallo Company begins business on January 2, 2016, with 15 employees. Its company policy
is to permit each employee to take 6 days of paid sick leave each year and U/j days of paid
vacation leave for each month worked. The sick leave, if not used, accumulates to a 24-day
maximum. The vacation leave accumulates for 2 years, but at any time after a 1-year period, the
employee may request additional compensation in lieu of taking paid vacation leave. Rexallo
prefers to record the liability' for compensated absences on a quarterly basis. Assume that the
gross salaries for each employee arc $ 100 per day.The following selected events take place
during the first two quarters of 2016:• On March 31, 2016, the quarterly liability' for
compensated absences is to be recorded.• On April 30, 2016, the following $45,000 monthly
payroll, including paid vacation and sick leave, is summarized from Rexallo’s records:• On
June 30, 2016, the quarterly liability' for compensated absences is to be recorded.Required:1.
Prepare journal entries to record the preceding events, ignoring payroll taxes and assuming that
both sick leave and vacation time meet the requirements of GAAP for accrual.2. Prepare a
partial interim balance sheet as of June 30,2016, to disclose the liability created in Requirement
1.3. Next Level Discuss the underlying conceptual basis of accounting for compensated
absences.View Solution:
Rexallo Company begins business on January 2 2016 with 15

ANSWER
http://paperinstant.com/downloads/rexallo-company-begins-business-on-
january-2-2016-with-15/

1/1
Powered by TCPDF (www.tcpdf.org)