Anthony Delivery Service has a weekly payroll of $35,000. December 31 falls on Tuesday and Anthony will pay its employees the following Monday (January 6) for the previous full week. Assume that Anthony has a five-day workweek and has an unadjusted balance in Salaries Expense of $885,000 at December 31. What is the December 31 balance of Salaries Expense after adjusting entries are recorded and posted?
A) $885,000
B) $920,000
C) $906,000
D) $899,000

Question

Quizplus · Accepted Answer

The adjustment for salaries expense needs to include the salaries for the days worked in December before the payroll is paid in January. Since December 31 is a Tuesday, there are two days of salaries (Monday and Tuesday) that belong to December but will be paid in January. The weekly payroll is $35,000, so each day's payroll is $35,000 / 5 = $7,000. For two days, this amounts to $14,000. Therefore, the adjusted balance in Salaries Expense is $885,000 + $14,000 = $899,000.

Anthony Delivery Service Has a Weekly Payroll of $35,000