During Its First Year of Operations, a Company Granted Employees

Multiple Choice

During its first year of operations, a company granted employees vacation privileges and pension rights estimated at a cost of $21,500 and $15,000. The vacations are expected to be taken in the next year and the pension rights are expected to be paid in the future 5-30 years. What is the total cost of vacation pay and pension rights to be recognized in the first year?

A) $15,000
B) $36,500
C) $6,500
D) $21,500