Question

Chris was paid a salary of 10,000 in cash (80% related to administrative activities and 20%...

Chris was paid a salary of 10,000 in cash (80% related to administrative activities and 20% related to his work in the flip-flop manufacturing facility). What would be the journal entry for this?

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Answer #1

Any Expenses incurred on manufacturing activity should charge to that manufacturing products other wise cost of products would be reduce from the actual expenses incurred resulting into losses of the company

any expenses incurred for Administrative purpose charge as a salary

from the information in question

cash paid 10000

Administrative Purpose is 80% = 10000*80% =8000

flip flop manufacturing Activity is 20% =10000*20% =2000

Journal Entry for the payment

Salary A/c Dr    8000

Flip Flop Manufacturing A/c Dr 2000

   Cash A/c 10000

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