Employees of the City of Hyacinth are paid from the general fund semi-monthly on the 15th day and the last day of the mo
Posted: Sat Mar 19, 2022 5:56 pm
Employees of the City of Hyacinth are paid from the general fund
semi-monthly on the 15th day and the last day of
the month. The city provides numerous employee
benefits. Employees earn ten vacation days for each 12 months
of employment. The employee can take the vacation during any
summer months (May-September) prior to retirement. The
employees also earn one sick day for each month of
employment. Sick pay vests at the completion of five years of
continuous service. Vested unused sick pay will be paid upon
retirement or termination. The city contributes to a retirement
plan that is administered by the state. Each year the city
gets a statement from the state explaining the actuarially
determined contribution required.
The city recognizes
revenues/expenditures when collected/paid or if collected/paid
within 60 days of year-end. The city’s fiscal year end is
December 31. At the beginning of the current year employees
had $0.4 million of earned vacation time and $7 million of vested
earned sick leave. The city uses the FIFO method of
accounting for vacation and sick days.
REQUIRED: Assuming that the city maintains its books and
records in a manner to facilitate the preparation of fund financial
statements, record the following transactions related to employee
salaries and benefits.
a. During the year employees of the city earned $60
million in salaries. At year-end all but $2 million had been
paid to the employees.
b. During the year the employees of the city earned
$2.5 million in vacation pay. By year-end the employees had
taken $2 million of vacation. Of the balance of vacation pay
due to the employees, the city estimates that $0.3 million will be
taken during the next year and $0.2 million will be deferred until
later.
c. During the year the employees of the city earned
$3 million in sick pay, of which
$2.5 million is expected to vest. Of the $2.5 million,
employees are expected to take $2.0 million and $0.5 million is
expected to be paid to employees upon their termination or
retirement. During the year employees took $1 million in sick
days.
d. The city received a statement from the state
requiring a contribution to the retirement plan of $8 million for
the current year. Because of a cash shortage the city paid $6
million of the required contribution during the year, $1.5 million
on February 15 of the following year and $0.5 million in June of
the following year.
semi-monthly on the 15th day and the last day of
the month. The city provides numerous employee
benefits. Employees earn ten vacation days for each 12 months
of employment. The employee can take the vacation during any
summer months (May-September) prior to retirement. The
employees also earn one sick day for each month of
employment. Sick pay vests at the completion of five years of
continuous service. Vested unused sick pay will be paid upon
retirement or termination. The city contributes to a retirement
plan that is administered by the state. Each year the city
gets a statement from the state explaining the actuarially
determined contribution required.
The city recognizes
revenues/expenditures when collected/paid or if collected/paid
within 60 days of year-end. The city’s fiscal year end is
December 31. At the beginning of the current year employees
had $0.4 million of earned vacation time and $7 million of vested
earned sick leave. The city uses the FIFO method of
accounting for vacation and sick days.
REQUIRED: Assuming that the city maintains its books and
records in a manner to facilitate the preparation of fund financial
statements, record the following transactions related to employee
salaries and benefits.
a. During the year employees of the city earned $60
million in salaries. At year-end all but $2 million had been
paid to the employees.
b. During the year the employees of the city earned
$2.5 million in vacation pay. By year-end the employees had
taken $2 million of vacation. Of the balance of vacation pay
due to the employees, the city estimates that $0.3 million will be
taken during the next year and $0.2 million will be deferred until
later.
c. During the year the employees of the city earned
$3 million in sick pay, of which
$2.5 million is expected to vest. Of the $2.5 million,
employees are expected to take $2.0 million and $0.5 million is
expected to be paid to employees upon their termination or
retirement. During the year employees took $1 million in sick
days.
d. The city received a statement from the state
requiring a contribution to the retirement plan of $8 million for
the current year. Because of a cash shortage the city paid $6
million of the required contribution during the year, $1.5 million
on February 15 of the following year and $0.5 million in June of
the following year.