Question

Assume that the weekly payroll of Hunter Hardware, Inc., is $1,000. The end of the year, December 31, falls on Tuesday. Hunter Hardware will pay its employees on Friday for the full week. What adjusting entry will Hunter Hardware make on Tuesday, December 31? (Use five days as a full workweek.)Date Accounts and Explanations Debit CreditA. Salaries Expense 400 Salaries Payable 400B. Salaries Payable 400 Salaries Expense 400C. Salaries Expense 600 Cash 600D. Salaries Expense 600 Salaries Payable 600

Answer 1

Answer:

A. Dr Salaries Expense 400

Cr Salaries Payable 400

Explanation:

The adjusting Journal entry that Hunter Hardware make on Tuesday, December 31 will be: Dr Salaries Expense 400

Cr Salaries Payable 400

Calculated as:

First step is to calculate the Accrued salary

Using this formula

Accrued salary=Weekly payroll / 5 days*Number of days for which salary were not paid

Let plug in the formula

Accrued salary = $1,000/5 days*2days

Accrued salary= $200 x 2 days

Accrued salary= $400

Therefore the adjusting Journal entry that Hunter Hardware make on Tuesday, December 31 will be to Debit Salaries Expense 400 and

Credit Salaries Payable 400