A company's five-day weekly payroll of $2,940 is paid on Fridays.Assume that the last day of the month falls on Wednesday.Which of the following is the required adjusting entry for the month end?

Question

Quizplus · Accepted Answer

Since payday is on Friday, three days' worth of salaries will be accrued at the end of the month. To calculate the amount of the adjustment, divide the weekly payroll amount by 5 to arrive at the daily payroll amount, and then multiply that amount by 3 for the three days of payroll owed at the end of the month:

$2,940 / 5 = $588 (daily payroll)
$588 x 3 = $1,764 (accrued salaries at month end)

The adjusting entry is to debit Salaries Expense for $1,764 and credit Salaries Payable for $1,764. This records the expense for the accrued salaries and increases the liability of salaries payable.

A Company's Five-Day Weekly Payroll of $2,940 Is Paid on Fridays.Assume