Millie's Bakery employees earn $4,500 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

Since the employees earn $4,500 a week and work for five days, the amount owed to them for the last week of December will be $2,700 ($4,500/5*3). Therefore, an adjusting entry is needed to record the owed but unpaid salaries as of December 31, which would be a debit to Salaries Expense for $2,700 and a credit to Salaries Payable for $2,700. Option B is the correct answer. Option A is incorrect because it only records a portion of the amount owed. Option C is incorrect because Income Summary is not used to record salaries. Option D is incorrect because it mistakenly records the entire $4,500 as an expense, rather than the amount that is owed or accrued.

Millie's Bakery Employees Earn $4,500 a Week for a Five-Day