Question

The employees of Xitrex, Inc., are paid each Friday. The company's fiscal year-end is June 30, which falls on a Wednesday for the current year. Salaries are earned evenly throughout the five-day work week, and $16,000 will be paid on Friday, July 2. Required: 1. Prepare an adjusting entry to record the accrued salaries as of June 30, a reversing entry on July 1, and an entry to record the payment of salaries on July 2. 2. Prepare journal entries to record the accrued salaries as of June 30 and the payment of salaries on July 2 assuming a reversing entry is not recorded. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an adjusting entry to record the accrued salaries as of June 30, a reversing entry on July 1, and an entry to record the payment of salaries on July 2. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < 2 3 Record the accrued salaries as of June 30.

Answer 1

1)
Date	Account Titles and Explanations	Debit	Credit
Jun. 30	Salaries and Wages Expenses	$16,000
	Salaries and Wages Payable		$16,000
	(To record the accrual of salaries and wages expense)
Jul. 1	Salaries and Wages Payable	$16,000
	Salaries and Wages Expense		$16,000
	(To record the reversing entry on July 1)
Jul. 2	Salaries and Wages Expenses	$16,000
	Cash		$16,000
	(To record the payment of salaries and wages expenses)
2)
Date	Account Titles and Explanations	Debit	Credit
Jun. 30	Salaries and Wages Expenses	$16,000
	Salaries and Wages Payable		$16,000
	(To record the accrual of salaries and wages expense)
Jul. 2	Salaries and Wages Payable	$16,000
	Cash		$16,000
	(To record the payment of salaries and wages expenses)

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	Assets	=	Liabilities	+	Paid-in Capital	+	Retained Earnings
1)	$280,000				$280,000
2)	$27,000		$27,000
3)	$86,000		$86,000
4)	$44,000						$44,000
5)	($4,000)						($4,000)
6)	$0
7)	($66,000)		($66,000)
8)	$0
9)	($900)						($900)
4) Assets & Retained will increase by $110,000 through accounts receivable and sales revennue and inventory will decrease by $66,000 and expenses are recorded at $66,000 so the net impact is $44,000 ($110,000 - $66,000 = $44,000).
6) Asset will increase by $5,800 through prepaid expenses and decreased by cash, hence, final impact is $0
8) Assets will increase by $49,500 through cash and assets will decrease by $49,500 through accounts receivable so the net impact is $0.