1. FINANCIAL MANAGEMENT GUIDE © Marin Management, Inc. 1 7100. General Accounting Procedures, 7174 Accrued Vacations A. The Purpose of This Policy The purpose of this policy is to assure that vacation expense is shown in the financial period in which our obligation to pay it occurred, rather than in the financial period in which the vacation was taken. Continue ►

2. FINANCIAL MANAGEMENT GUIDE © Marin Management, Inc. 2 7100. General Accounting Procedures, 7174 Accrued Vacations B. Vacation Policy The amount of vacation accrued, if any, depends on our vacation policy. In California, our employment policies specify that vacations are accrued daily or monthly. In other states, they are earned on each employee's anniversary date. The amount of vacation time earned depends on amount of hours worked, exempt status and number of years with the Company. See the Hotel Employee Handbook before calculating earned and accrued vacation. Continue ►

3. FINANCIAL MANAGEMENT GUIDE © Marin Management, Inc. 3 7100. General Accounting Procedures, 7174 Accrued Vacations C. Calculating Earned and Accrued Vacation Expense To calculate the amount of earned vacation pay, the anniversary date is moved back to adjust for leaves of absence. Employees do not earn vacation pay while on leave of absence. For example, if an employee took a six-month leave of absence, his or her vacation-earned date would be moved back six months after his or her anniversary date. For accounting purposes, we incur the liability to pay for vacation time on the anniversary (or adjusted anniversary) date of each employee. On each employee's anniversary date, calculate the vacation time earned and multiply it times the wage or salary rate. Use that amount to make the following postings: Debit: Department vacation expense Credit: Liability account, vacation accrual Continue ►

4. FINANCIAL MANAGEMENT GUIDE © Marin Management, Inc. 4 7100. General Accounting Procedures, 7174 Accrued Vacations C. Calculating Earned and Accrued Vacation Expense (cont.) The accounting administrator (general manager or office manager) keeps a chronological list of employees' anniversary dates (and adjusted "anniversary" dates) to assist with efficiently making the above entries. To generate the vacation paycheck, use the Hourly Final Vacation Pay Worksheet or the Salaried Final Vacation Pay Worksheet (available on MMI Team Site). Use both if the employee was both hourly and salaried during his or her employment. Post the amount of the gross salary or wage as follows:MMI Team Site Debit: Liability account, vacation accrual Credit: Bank account from which the payment was made End

5. FINANCIAL MANAGEMENT GUIDE © Marin Management, Inc. 5 7100. General Accounting Procedures, 7174 Accrued Vacations