The bank statements of Waylon Taylor Textiles Ltd. for $20 \times 7$ included the following items:
$\begin{array}{|l|r|}
\hline \text { Insurance premiums paid } & \$ 12,400 \
\hline \text { Interest collected } & \$ 25,900 \
\hline \text { Salaries paid } & \$ 125,200 \
\hline
\end{array}$
The following balances have been excerpted from the company's Statement of Financial Position:
$\begin{array}{|l|r|r|}
\hline & \text { December 31, 20X7 } & \text { December 31, 20X6 } \
\hline \text { Prepaid insurance } & \$ 1,400 & \$ 1,700 \
\hline \text { Accrued interest receivable } & \$ 3,700 & \$ 2,900 \
\hline \text { Accrued salaries payable } & \$ 12,300 & \$ 10,600 \
\hline
\end{array}$
-How much salaries expense should WTT report on its 20X7 statement of earnings?

Question

Quizplus · Accepted Answer

Salaries expense for WTT in 20X7 is calculated by adjusting the salaries paid with the change in accrued salaries payable. The salaries paid were $125,200, and the accrued salaries payable increased from $10,600 at the beginning of the year to $12,300 at the end of the year, an increase of $1,700. Therefore, the total salaries expense is $125,200 (salaries paid) + $1,700 (increase in accrued salaries payable) = $126,900.

The Bank Statements of Waylon Taylor Textiles Ltd 20×720 \times 720×7

The Bank Statements of Waylon Taylor Textiles Ltd $20 \times 7$