Question

City employees earn 6M in vacation leave. Of this amount, they are paid4.5M in 2017 and postpone the balance until future years. The leave vests and can be taken anytime up to retirement or as additional compensation at the time of retirement. What is the total amount of vacation leave earned by city employees?

1) 6M
2) 4.5M
3) 2.5M
4) Cannot be determined

Answer 1

The total amount of vacation leave earned by city employees is 6M.

Step-by-step explanation:

The total amount of vacation leave earned by city employees is 6M.

Although they are paid 4.5M in 2017, the remaining balance of 1.5M is postponed until future years. This balance is still considered earned vacation leave as it vests and can be taken up to retirement or used as additional compensation at the time of retirement.