Thistle Upholstery Company manufactures and repairs custom upholstered furniture. The company has a September 30 fiscal year-end and the bookkeeper has come to you requesting the following help:
a. Thistle employs 5 employees who earn 12 paid vacation days a year. At the beginning of September, the balance in the Vacation Payable account was $11,600 which represented 4 unused vacation days for the 5 employees accrued at $180 a day in 2019,and 8 vacation days for the five employees accrued at the current wage of $200 a day. In keeping with the company policy of using vacation days within a year of being earned, the five employees each take a seven-day vacation during September. Prepare the journal entry to record the vacation pay payout.
b. One of the design technicians had helped out in the office during this vacation time and had recorded a $4,318.72 invoice entirely as Sales Revenue even though this amount also includes both 5% GST and 7% PST. Prepare the journal entry to correct this error.
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