Problem
Martinez Company began operations on January 2, 2016. It employs 10 individuals who work 8-hour days and are paid hourly. Each employee earns 11 paid vacation days and 7 paid sick days annually. Vacation days may be taken after January 15 of the year following the year in which they are earned. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional information is as follows.
|
Actual Hourly
Wage Rate
|
Vacation Days Used
by Each Employee
|
Sick Days Used
by Each Employee
|
|
2016
|
2017
|
2016
|
2017
|
2016
|
2017
|
|
$9
|
$10
|
0
|
10
|
5
|
6
|
Martinez Company has chosen to accrue the cost of compensated absences at rates of pay in effect during the period when earned and to accrue sick pay when earned.
Prepare journal entries to record transactions related to compensated absences during 2016 and 2017.