M CorpHas an Employee Benefit Plan for Compensated Absences That Gives

question 92

Multiple Choice

M Corp.has an employee benefit plan for compensated absences that gives each employee 15 paid vacation days.Vacation days can be carried over indefinitely.Employees can elect to receive payment in lieu of vacation days.At December 31,2016,M's unadjusted balance of liability for compensated absences was $30,000.M estimated that there were 200 total vacation days available at December 31,2016.M's employees earn an average of $150 per day.In its December 31,2016,balance sheet,what amount of liability for compensated absences is M required to report?

• A)$ 0.
• B)$ 30,000.
• C)$225,000.
• D)$450,000.

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Definitions:

Laffer Curve

An illustration of the relationship between tax rates and tax revenue, suggesting there's an optimal tax rate that maximizes revenue.

Tax Revenue

The capital governments gather through the imposition of taxes.

Tax

A compulsory financial charge or some other type of levy imposed on a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Flexible Benefits

A program that allows employees to choose from a range of benefit options.