Pandora Company determined that it has an obligation relating to employees' rights to receive compensation for future absences attributable to employees services already rendered.The obligation relates to rights that vest,and payment of the compensation is probable.The amounts of Pandora's obligations as of December 31 are reasonably estimated as follows:

In its December 31 balance sheet,what amount should Pandora report as its liability for compensated absences?

Question

Pandora Company determined that it has an obligation relating to employees' rights to receive compensation for future absences attributable to employees services already rendered.The obligation relates to rights that vest,and payment of the compensation is probable.The amounts of Pandora's obligations as of December 31 are reasonably estimated as follows:

In its December 31 balance sheet,what amount should Pandora report as its liability for compensated absences?

Quizplus · Accepted Answer

According to the information given in the question, Pandora has an obligation related to employees' rights to receive compensation for future absences attributable to employees services already rendered. The obligation relates to rights that vest, and payment of the compensation is probable. The amounts of Pandora's obligations as of December 31 are reasonably estimated as follows:
- Current employees' vesting rights: $100,000
- Noncurrent employees' vesting rights: $90,000

Therefore, the total estimated obligation as of December 31 is $190,000, which should be reported as a liability on Pandora's balance sheet. Option A is the correct answer. Options B, C, and D are incorrect.

Pandora Company Determined That It Has an Obligation Relating to Employees