Of a company's employees,75 percent typically qualify to receive two weeks' paid vacation out of 50 working weeks per year.The entry to record the amount of estimated liability for vacation pay for a week in which the total payroll is $19,200 :
A) Estimated Liability for Vacation Pay 288
Cash 288
B) Vacation Pay Expense 576
Estimated Liability for Vacation Pay 576
C) Vacation Pay Expense 14,400
Cash 14,400
D) Cash 512
Estimated Liability for Vacation Pay 512

Question

Quizplus · Accepted Answer

The estimated liability for vacation pay is calculated as 75% of the employees qualifying for 2 weeks of vacation out of 50 weeks, which is 3% (0.75 * 2/50) of the total payroll. Therefore, 3% of $19,200 is $576.

Of a Company's Employees,75 Percent Typically Qualify to Receive Two