Question

All employees are paid weekly on Friday. The average payroll is $5,000 weekly for a 6 day work week. Employees were last paid on 12/29/2017 for the week ended 12/23/2017. Because Coughlan is Canadian, her policy is to give all employees paid holidays for Christmas Day and the following day, which is known as Boxing Day in Canada. This will be reflected in the paychecks distributed on 1/5/2018. What is the adjusting entry?

Coughlan’s Flowers
Unadjusted trial Balance
December 31, 2017
			Dr.	Cr.
Cash			$125,600
Investments Accounts receivable, 12/31/16			300,000 116,200
Allowance for doubtful accounts, 12/31/16				$20,000
Inventory, 12/31/16			62,000
Furniture and Fixtures			118,200
Accumulated depreciation, Furniture & Fixtures 12/31/16				32,400
Accounts payable, 12/31/16				42,000
Capital stock, $10 par value				50,000
Retained earnings, 12/31/16				242,000
Sales				1,549,100
Notes payable 4%, due 3/31/18				200,000
Purchases			906,600
Fencing expense			80,000
Salaries expense			262,000
Income tax expense			45,000
Interest expense				6,000
Insurance expense			34,100
Rent expense			34,200
Utilities expense			12,600
Freight in			15,000
Freight out			17,000
Travel expense			13,000
TOTALS			$2,141,500	$2,141,500

Answer 1

Salary paid for 23.12.17
(the day will be Saturday)
24.12.17 and 31.12.17 will be sunday
The other two holidays will be paid.
Therefore, the employer has to pay for salaries i.e. 25.12.17 to 30.12.17 i.e. 6 days
Therefore, the salaries payable at the end is $ 5000 (i.e. six day week period)
Salaries and wages expenses Dr.				5000
Salaries and wages expense payable					5000