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Prior to adjustment at April 30, the end of the fiscal year, Salary Expense has a...

Prior to adjustment at April 30, the end of the fiscal year, Salary Expense has a debit balance of $372,750. Salaries owed but not paid as of the same date total $5,275. On May 2, $6,000 is paid.

  1. Present all necessary entries assuming a reversing entry is used.
  2. Present all necessary entries assuming NO reversing entry is used.

Solutions

Expert Solution

Part a

Present all necessary entries assuming a reversing entry is used.
Date General Journal Debit Credit
Adjusting entry
Apr 30 Salary expense $        5,275
Salary payable $        5,275
To record accrued salaries as of April 30.
Reversing entry
May 1 Salary payable $        5,275
Salary expense $        5,275
To record reverse entry of accrued salaries as of April 30.
Journal entry
May 2 Salary expense $        6,000
Cash $        6,000
To record salaries paid.

Part b

Present all necessary entries assuming NO reversing entry is used.
Date General Journal Debit Credit
Adjusting entry
Apr 30 Salary expense $        5,275
Salary payable $        5,275
To record accrued salaries as of April 30.
Journal entry
May 2 Salary payable $        5,275
Salary expense $           725
Cash $        6,000
To record salaries paid.
Current month's salary expense = 6000-5275 = 725

ekkarill92 answered 1 year ago
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