Question

In: Accounting

July 31, 2016, the end of the quarter, is on a Wednesday. Employees get paid each...

July 31, 2016, the end of the quarter, is on a Wednesday. Employees get paid each Friday for the week just worked. The company has five employees who earn $100 each per day. Make the Accrued Salaries Expense journal entry for Wednesday, July 31, 2016. Enter the date, accounts, debit and credit, and be sure to indent the credit line.

Solutions

Expert Solution

Since July 31, 2016 is on Wednesday
normally Employee gets paid on Friday for the week just they worked.
Since to book the expense for the month end, they should follow the accrual system.
Expense to be booked = Total number of employees * Pay per day * No of days they should get payment till Wednesday.
5*100*3
$1,500.00
Journal Entry :
Date Accounts title and explaination Debit Credit
31-07-16 Salary Expense $1,500.00
   To Accrued salary $1,500.00
(Being expense booked for the month end)
Note :
Salary expense will be treated as an expense and will be shown in Profit and loss Account.
Accrued salary is a liability account which can be set off when payment was done.
Journal entry when payment made :
Date Accounts title and explaination Debit Credit
Accrued salary $1,500.00
   To cash $1,500.00
(When payment is made )

ekkarill92 answered 7 months ago
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