Question

1) Perimeter Realty Co. pays weekly salaries of $14,800 on Friday for a five-day workweek ending on that day.

a. Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends on Wednesday. If an amount box does not require an entry, leave it blank.

b. Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends on Thursday. If an amount box does not require an entry, leave it blank.

Answer 1

Weekly salaries = $ 14,800

Working days in a week = 5.days

Per day salaries = $ 14,800 / 5 = $ 2,960

A) If the accounting period ends on Wednesday then salaries remain outstanding on the period end = $ 2,960 X 3 [ Mon ,Tue, Wed ]= $ 8,880 because it will be paid on next Friday.

Adjusting Journal Entry

Date	Accounts title and explanation	Debit	Credit
Period End, date	Salaries Expense	8,880
	Outstanding Salaries [ 14,800/ 5] X 3		8,880
	[Adjusting entry made for salaries expense due but unpaid salaries ]

B) If the accounting period ends on Thursday then salaries remain outstanding on the period end = $ 2,960 X 4 [ Mon , Tue, Wed , Thu ]=$ 11,840 because it will be paid on next Friday.

Adjusting Journal Entry

Date	Accounts Title and explanation	Debit	Credit
Period end date	Salaries Expense	11,840
	Outstanding Salaries [ 14,800/ 5] X 4		11,840
	[Adjusting Entry made for salaries expense due but not paid ]

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