Question

Paradise Realty Co. pays weekly salaries of $45,500 on Friday for a five-day workweek ending on that day. a. Journalize the necessary adjusting entry at the end of the accounting period assuming that the period ends on Monday. b. Journalize the necessary adjusting entry at the end of the accounting period assuming that the period ends on Thursday.

Answer 1

Answer:

JOURNAL ENTRY

Dr Weekly Salary..............9,100

Cr. Accrued Salaries........................9,100

Explanation:

a. Journalize the necessary adjusting entry at the end of the accounting period assuming that the period ends on Monday.

The week ending on Monday implies that there would be one day weekly salary unpaid which 45,500 / 5 = $9,100

JOURNAL ENTRY

Dr Weekly Salary..............9,100

Cr. Accrued Salaries........................9,100

Being one day of weekly salaries accrued but unpaid at the end of the period

b. Journalize the necessary adjusting entry at the end of the accounting period assuming that the period ends on Thursday.

The week ending on Thursday implies that there would be four days weekly salary unpaid which (45,500 / 5)  x 4 days = $9,100 x 4 = $36,400

JOURNAL ENTRY

Dr Weekly Salary..............36,400

Cr. Accrued Salaries........................36,400

Being four days of weekly salaries accrued but unpaid at the end of the period.