Question

At the beginning of the current year, Paxx County’s enterprise fund had a $125,000 balance for accrued compensated absences. At the end of the year, the balance was $150,000. During the year, Paxx paid $400,000 for compensated absences. What amount of compensated absences expense should Paxx County’s enterprise fund report for the year?

a.$425,000
b.$550,000
c.$375,000
d.$400,000

Answer 1

a. $425,000

Step-by-step explanation:

Calculation of compensated absences expense for the year

Closing balance of compensated absences = $150,000

+ Payments made for compensated expenses = $400,000

- Opening balance of compensated absences = - $125,000

Compensated absences expense for the year = $425,000