BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

Solutions

Chapter
Section
BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
79 views

Adjusting entries for accrued salaries

Ocular Realty Co. pays weekly salaries of $16,600 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.

(a)

To determine

Accrued Expenses

Accrued expense refers to the expenses those are unpaid, but the goods and services related to the payment are received in a particular accounting period. These accrued expenses are payable for the business. Business treats accrued expenses as a liability.

Adjusting Entries

Adjusting entries indicates those entries, which are passed in the books of accounts at the end of one accounting period. These entries are passed in the books of accounts as per the revenue recognition principle and the expenses recognition principle to adjust the revenue, and the expenses of a business in the period of their occurrence.

Rule of Debit and Credit:

Debit - Increase in all assets, expenses & dividends, and decrease in all liabilities and stockholders’ equity.

Credit - Increase in all liabilities and stockholders’ equity, and decrease in all assets & expenses.

To record: The adjusting entry for the accrued salary for the period ending on Wednesday.

Explanation
  • Salaries expenses are component of stockholders’ equity and it decreased it. So debit salaries expenses by $9,960.
  • Salaries Payable is liability, and it is increased by $9,960. So credit salaries payable by $9,960.

Working Note:

Calculation of salaries payable on Wednesday

SalariesPayableonWednesday=(WeeklySalariesNumberofworkingdaysin

(b)

To determine

To record: The adjusting entry for the accrued salary for the period ending on Thursday.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

REGRESSION AND INVENTORIES jasper Furnishings has 300 million in sales. The company expects that its sales will...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

What happens when a firm makes a decision to grow from within?

Foundations of Business (MindTap Course List)