Jogg Corp.'s plant operates five days per week with a daily payroll of $50,000.Employees are paid every Tuesday for the prior week's work (Monday through Friday).The last day of the month is Tuesday,April 30.What effect does the accrual at April 30 have on Jogg's net income?

Question

Quizplus · Accepted Answer

Since April 30 is a Tuesday, Jogg Corp. will have to accrue an additional two days of payroll (April 29 and April 30) for the week prior. This means they will need to accrue an additional $100,000 ($50,000 x 2) in payroll expenses. Therefore, the effect on Jogg Corp.'s net income will be a decrease of $100,000.

Jogg Corp'S Plant Operates Five Days Per Week with a Daily