Belvedere, Inc. has an annual payroll of $250,000. The firm pays employees every two weeks on Friday afternoon. Last month, the books were closed on the Thursday after payday. How much is the payroll accrual at the end of the month? (Round to nearest $)

Question

Quizplus · Accepted Answer

To calculate the payroll accrual at the end of the month, we first need to determine the daily payroll expense. With an annual payroll of $250,000 and assuming a year has 52 weeks, the weekly payroll is $250,000 / 52 = $4,807.69. Since employees are paid every two weeks, we divide this weekly amount by 5 (assuming a 5-day work week) to get the daily payroll expense: $4,807.69 / 5 = $961.54. The books were closed on Thursday after payday, meaning there's one day (Friday) of payroll that needs to be accrued for at the end of the month. Therefore, the payroll accrual is $961.54, which when rounded to the nearest dollar, does not match any of the provided options directly. However, the correct approach involves calculating the payroll for the entire period that needs to be accrued for, not just a single day. Since the question specifies the accrual is for the end of the month and payroll is bi-weekly, we need to calculate how much of the payroll period falls into the next month. Assuming a typical 2-week (14 days) payroll cycle and that the books were closed right after a payday, we need to accrue for the days worked that will be paid in the next payroll cycle. Without specific dates, a precise calculation can't be made, but the intent seems to be to find the accrual for a period not covered by the question's details. The correct calculation for a monthly accrual based on the annual payroll would involve dividing the annual payroll by 12, but this doesn't match the scenario described. Given the misunderstanding in the initial explanation, the correct answer is based on the need to accrue payroll for a period not explicitly covered in the question, which seems to have been misinterpreted. The correct approach would involve calculating the payroll expense for the period from the last payday to the end of the month, which cannot be precisely determined without more specific dates.