Question

Adjusting, Closing and Reversing Entries

1. Prepare the entries without making a reversing entry. For a compound transaction, if an amount box does not require an entry, leave it blank. If no entry is required, select "No Entry Required" and leave the amount boxes blank or enter "0".

2. Prepare the entries with the use of a reversing entry. If an amount box does not require an entry, leave it blank. If no entry is required, select "No Entry Required" and leave the amount boxes blank or enter "0".

3. Use T-accounts to assist your analysis for without making a reversing entry.

Prepare entries for (a), (b), and (c) listed below using two methods. First, prepare the entries without making a reversing entry. Second, prepare the entries with the use of a reversing entry. Use T-accounts to assist your analysis.

Wages paid during 20-1 are $20,800.

Wages earned but not paid (accrued) as of December 31, 20-1, are $300.

On January 3, 20-2, payroll of $800 is paid, which includes the $300 of wages earned but not paid in December.

Answer 1

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	1. Without making a reversing Entries					Wages Expense
							Debit	Credit
Date	Account	Debit	Credit			Jan 3	500
Dec 2001	Wages Expense	20800
	Cash		20800			Wages Payable
							Debit	Credit
Dec 31, 2001	Wages Expense	300				Jan 3	300	300	Beginning
	Wages Payable		300
Jan 3, 2002	Wages Payable	300
	Wages Expense	500
	Cash		800
	2. With making a reversing Entries					Wages Expense
							Debit	Credit
Date	Account	Debit	Credit			Jan 3	800	300	Jan 3
Dec 2001	Wages Expense	20800
	Cash		20800			Wages Payable
							Debit	Credit
Dec 31, 2001	Wages Expense	300				Jan 3	300	300	Beginning
	Wages Payable		300
Jan 3, 2002	Wages Payable	300
	Wages Expense		300
Jan 3, 2002	Wages Expense	800
	Cash		800