Use the Following Information for Questions

question 53

Multiple Choice

Use the following information for questions.
Vargas Company has 35 employees who work 8-hour days and are paid hourly.On January 1, 2010, the company began a program of granting its employees 10 days of paid vacation each year.Vacation days earned in 2010 may first be taken on January 1, 2011.Information relative to these employees is as follows:
Vargas has chosen to accrue the liability for compensated absences at the current rates of pay in effect when the compensated time is earned.
-What is the amount of expense relative to compensated absences that should be reported on Vargas's income statement for 2010?

• A)$0.
• B)$68,880.
• C)$75,600.
• D)$72,240.

---

Definitions:

Conversion

The act of changing something from one form or use to another, in legal terms, often referring to unauthorized possession or use of property.

Automobile

A road vehicle, typically with four wheels, powered by an internal combustion engine or electric motor, designed to transport people.

Legal Action

A formal proceeding in which a case is brought before a court for decision-making regarding an issue or dispute.

Refurbished Computer Equipment

Equipment that has been returned to the manufacturer or vendor, repaired if necessary, tested, and then sold again, often at a lower price.