Q10SE - Horngren'S Financial And Managerial Accounting

Question

Samuel Industries has three employees. Each employee earns two vacation days a month. Samuel pays each employee a weekly salary of $1,250 for a five-day workweek. Requirements

1. Determine the amount of vacation expense for one month.

2. Journalize the entry to accrue the vacation expense for the month.

Step-by-Step Solution

Answer

1. Vacation expenses = $1,000
2. Employee vacation expense debit and payable credit with $1,000

Step 1: Vacation Payment

$\begin{array}{l}\begin{array}{c}\text{Vacation expence for the month }=\text{ employees}\times \text{Monthly salary}\times \frac{\text{2}}{\text{30}}\\ =\text{ 3×}\left(\text{\$1,250×4}\right)\text{\hspace{0.17em}×\hspace{0.17em}}\frac{\text{2}}{\text{30}}\\ =\$1,000\end{array}\end{array}$

Step 2: Journal Entries

Date	Particulars	Debit	Credit
	Employee Vacation Expense	$1,000
	Employee Vacation Payable		$1,000
	(To record employee accrue vacation expense)