Molly Mocha employs one college student every summer in her coffee shop. The student works the five weekdays and is paid on the
following Monday. (For example, a student who works Monday through Friday, June 1 through June 5, is paid for that work on Monday, June 8.) The coffee shop adjusts its books monthly, if needed, to show salaries earned but unpaid at month-end. The student works the last week of July, which is Monday, July 28, through Friday, August 1. If the student earns $200 per day, what adjusting entry must the coffee shop make on July 31 to correctly record accrued salaries expense for July?
1 answer:
Explanation:
Accrued salaries expense would be the expense that has been incurred but it is yet to be paid. Precisely, it is the outstanding expense that is unpaid.
The student worked from July 28 (Monday) till August 1 (Friday). The books are closed on 31st July. Thus, the company would record accrued salaries for the last four days of the month i.e., 28th, 29th, 30th and 31st July (Monday - Thursday).
No. of days unpaid = 4
Pay per day = $200
Accrued salaries = $200×4
Accrued salaries = $800
The journal entry to record the accrued salaries would be:
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