Question

Stress Free Realty Co. pays weekly salaries of $12,625 on Monday for a six-day workweek ending the preceding Saturday. Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends on Friday. Round your answers to nearest whole dollar.

Answer 1

Answer:

The correct answer is $10,520, and journal entry is shown below.

Explanation:

According to the scenario, the computation for the given data are as follows:

Weekly salary = $12,625 ( for 6 days)

So, Salary per day = $12,625 ÷ 6 = $2,104.17

Now, Salary for 5 days ( i.e. Mon. - Fri) = $2,104.17 × 5 = $10,520.85 or $10,520.

So, the Journal entry  on Friday are as follows:

Salary expense A/c Dr. $10,520

To Outstanding salary A/c $10,520

( Being salary expense is recorded)