Martin Services Company provides their employees vacation benefits and a defined contribution pension plan. Employees earned vacation pay of $39,500 for the period. The pension plan requires a contribution to the plan administrator equal to 9% of employee salaries. Salaries were $750,000 during the period. a. Provide the journal entry for the vacation pay. b. Provide the journal entry for the pension benefit.

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Jax Farmer

Business

3 January, 08:34

Martin Services Company provides their employees vacation benefits and a defined contribution pension plan. Employees earned vacation pay of $39,500 for the period. The pension plan requires a contribution to the plan administrator equal to 9% of employee salaries. Salaries were $750,000 during the period. a. Provide the journal entry for the vacation pay. b. Provide the journal entry for the pension benefit.

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Litzy Fisher · Answer 1

a. Provide the journal entry for the vacation pay

Employees earned vacation pay of $39,500 for the period.

Debit Credit

Vacation pay expense A/C $39,500

Vacation payable A/C $39,500

(Being vacation pay accrued for periods)

b. Provide the journal entry for the pension benefit.

9% of employee salaries and the salaries were $750,000

=> The pension plan requires a contribution to the plan administrator: $750,000*9% = $67,500

Debit Credit

Pension expense $750,000

To cash A/C $67,500

To unfunded pension liabilities $683,500

Hope it will find you well.