Millie's Bakery employees earn $450 a week for a five-day work week and are paid every Friday.If December 31 falls on a Wednesday,calculate the amount that is owed and select the adjusting entry needed to record the owed but unpaid salaries as of December 31.

Question

Quizplus · Accepted Answer

Employees earn $450 a week and are paid every Friday. Since December 31 falls on a Wednesday, there are 3 days of work left in the week that employees have not been paid for.
Therefore, the amount owed would be 3/5 of $450 or $270.
The adjusting entry needed to record the owed but unpaid salaries as of December 31 is a debit to Salaries Expense for $270 and a credit to Salaries Payable for $270. This is because the company has incurred the expense (Salaries Expense) but has not yet paid it out (Salaries Payable).

Millie's Bakery Employees Earn $450 a Week for a Five-Day