Answer:
The amount of expense for compensated absence to report in income statement for 2020 is $2,000,000.
Explanation:
This can be calculated using the following formula:
Amount to report in income statement for 2020 = Number of employees * Hourly wages in 2020 * Number of hours worked daily * Vacation Days Earned by Each Employee .......................... (1)
Where;
Number of employees = 500
Hourly wages in 2020 = $25
Number of hours worked daily = 8
Vacation Days Earned by Each Employee = 20
Substituting the values into equation (1) we have:
Amount to report in income statement for 2020 = 500 * $25 * 8 * 20
Amount to report in income statement for 2020 = $2,000,000
Therefore, the amount of expense for compensated absence to report in income statement for 2020 is $2,000,000.
