North Corp. has an employee benefit plan for compensated
absences that gives employees 10 paid vacation days and 10 paid
sick days. Both vacation and sick days can be carried over indefinitely.
Employees can elect to receive payment in lieu of vacation
days; however, no payment is given for sick days not taken. At
December 31, year 2, North’s unadjusted balance of liability for
compensated absences was $21,000. North estimated that there
were 150 vacation days and 75 sick days available at December
31, year 2. North’s employees earn an average of $100 per
day. In its December 31, year 2 balance sheet, what amount of
liability for compensated absences is North required to report?