Question

At December 31, accrued salaries payable totaled $3,500. On January 10, total salaries of $8,000 are paid. (a) Assume that reversing entries are made at January 1. Give the January 10 entry, and indicate the Salaries and Wages Expense account balance after the entry is posted. (b) Repeat part (a) assuming reversing entries are not made.

Answer 1

(a) Reversing entries are made:

Date	Particulars	Debit$	Credit
Jan1	Salary A/c Dr. To Accrued salary payable ( Being reversed accrued salary payable)	3500	3500
Jan 10	Salary A/c Dr To Cash A/c (Being salary paid)	8000	8000

Balance of Salaries and wages expense account = -3500+8000 = $4500

(b)If reversing entries were not made :

Date	Particulars	Debit$	Credit$
Jan1	No entry
Jan10	Salary A/c Accrued salary payable A/c To cash A/c (Being salary paid )	4500 3500	8000

Balance of Salary and wages expense account = $4500