Question
Asked Dec 4, 2019
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Garcia Realty Co. pays weekly salaries of $17,250 on Friday for a five-day workweek ending on that day. Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends (a) on Wednesday and (b) on Thursday.

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Expert Answer

Step 1

Adjusting entries:

Adjusting entries are those entries which are recorded at the end of the year, to update the income statement accounts (revenue and expenses) and balance sheet accounts (assets, liabilities, and stockholders’ equity) to maintain the records according to accrual basis principle.

Step 2

Journalize the necessary adjusting entry at the end of the accounting period:

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Debit Credit Account Titles and Explanation Date Ref. (S) (S) Salary expenses Salary payable (To record salary expenses incurred till Wednesday) $10,350 а. $10,350 Salary expenses Salary payable (To record salary expenses incurred till Thursday b. $13,800 $13,800

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Step 3

Workings:

Compute the salary per day:...

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Weekly salary Workweek ending day Salary $17,250 5 days = $3,450

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