Question

Bonita Industries pays all salaried employees on a biweekly basis. Overtime pay, however, is paid in the next biweekly period. Bonita accrues salaries expense only at its December 31 year end. Data relating to salaries earned in December 2020 are as follows: Last payroll was paid on 12/26/20, for the 2-week period ended 12/26/20. Overtime pay earned in the 2-week period ended 12/26/20 was $26000. Remaining work days in 2020 were December 29, 30, 31, on which days there was no overtime. The recurring biweekly salaries total $445000.

Assuming a five-day workweek, Bonita should record a liability at December 31, 2020 for accrued salaries of:________

Answer 1

$159,500

Step-by-step explanation:

Liability for accrued salaries = $26,000 + ($445,000/10*3)

Liability for accrued salaries = $26,000 + $133,500

Liability for accrued salaries = $159,500

So, Bonita should record a liability at December 31, 2020 for accrued salaries of $159,500