Question

Assume that Best Buy made a December 31 adjusting entry to debit Salaries and Wages Expense and credit Salaries and Wages Payable for $4,380 for one of its departments. On January 2, Best Buy paid the weekly payroll of $7,560. Prepare Best Buy’s (a) January 1 reversing entry; (b) January 2 entry (assuming the reversing entry was prepared); and (c) January 2 entry (assuming the reversing entry was not prepared). (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Answer 1

Step-by-step explanation:

The reversing entries are shown below:

a. Salary and wages Payable A/c Dr $4,380

To Salary and wages Expense A/c $4,380

(Being reversing entry passed)

b. Salary and wages Expense A/c Dr $7,560

To Cash A/c $7,560

(Being reversing entry passed)

c. Salary and wages Payable A/c Dr $4,380

Salary and wages Expense A/c Dr $3,180

To Cash A/c $7,560

(Being reversing entry passed and the difference is debited to the Salary and wages Expense Account)