Question

Adjustment for accrued expense City Realty Co. pays weekly salaries of $34,500 on Monday for a six-day workweek ending the preceding Saturday. Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends on Friday. If an amount box does not require an entry, leave it blank.

Answer 1

To adjust for accrued salaries, calculate the daily rate from the weekly salary, multiply by the number of days in the period, and make an adjusting journal entry for the accrued amount, debiting Salaries Expense and crediting Salaries Payable.

Step-by-step explanation:

To journalize the necessary adjusting entry for accrued expenses for City Realty Co., we should first calculate how much salary is accrued for the workweek. Since the workweek ends on Saturday and salaries are paid on Monday, if the accounting period ends on Friday, we need to account for five days of salaries as an accrued expense.

The weekly salary is $34,500 for a six-day week, so the daily salary is $34,500 divided by 6, which equals $5,750 per day. To account for five days, we would accrue 5 times $5,750, which equals $28,750.

The adjusting journal entry would be:

• Debit: Salaries Expense $28,750
• Credit: Salaries Payable $28,750

This entry records the salaries expense that has been incurred, but not yet paid, by the end of the accounting period.