Broderick Company began operations on January 2, 2025. The following information was provided concerning the company's employees who are paid hourly.

Number of individuals employed 9 employees Number of hours worked per day 8 hours Paid vacation days earned annually by each employee 10 days Paid sick days earned annually by each employee 6 days

Vacation days may be taken after January 15 of the year following the year in which they are earned. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional information is as follows.

Actual Hourly Wage Rate Vacation Days Used by Each Employee Sick Days Used by Each Employee 2025 2026 2025 2026 2025 2026 $10 $11 0 9 4 5

Broderick Company has chosen not to accrue paid sick leave until used, and has chosen to accrue vacation time at expected future rates of pay without discounting. The company used the following projected rates to accrue vacation time.

2025 $10.75 2026 11.60 Instructions a. Prepare journal entries to record transactions related to compensated absences during 2025 and 2026. b. Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2025 and 2026.

NOTE: Enter a formula, a cell reference, or a value (if you are unable to reference a cell), into the yellow shaded input cells.

Accruals: Year Accrual Type # of Empl. Rate Hours/Day # of Days Accrual 2025 Vacation 2025 Sick leave

2026 Vacation 2026 Sick leave

Payment of Vacation Time Year Empl. Rate Hours/Day # of Days Payment

Debit Credit 2025 2025 2025 2026 2026 2026

Accrued liability at year-end: 2025 2026 January 1 balance December 31 balance