Question

In 2018, city employees earned 1.4 million in sick leave that they did not take during the year.The city estimated that of this amount, $0.8million will actually be a paid to employees who take sick leave. Of the balance, $0.1million will be paid to employee upon their retirement or resignation and $0.5million will not be paid ( since employees are limited. In the number of sick days tat they can carry from one year to the next). The amount tat the city should ad to fund statement liability account as of year end 2018 is:

A) $0

B)$0.1million

C)$0.8million

D) $0.9million

2) assume the above question facts,the amount that the city should add to their liability account in the government-wide statements of net position as of year end 2018 is

A) $0

B) $0.1million

C) $0.8million

D)$0.9million

Answer 1

1. Answer is option A.

Company has already decided that $0.5 million will not be paid and the rest amount which needs to be paid is already earned by company. So there is no amount that the city should ad to fund statement liability account as of year end 2018.

2. Answer is Option B.

As in the above statement it's mentioned that the $0.1 million will be paid to employee upon their retirement or resignation thus the same needs to be added to their liability account in the government-wide statements of net position of year end 2018.