Question

Company Y hired 7 employees on May 20, Year 1. All employees began working on the same date. The monthly salary for these employees was $3,000 each. Monthly paydays occur on the 20th for the month then ended. The first payday on June 20 was for a full month’s pay. All paydays occur as scheduled.
Required:
$_________ Year 1 Salary Expense for these employees
$_________ Prepaid Salaries at Dec. 31, Year 1 [if any] …If none, so state
$_________ Salaries Payable at Dec. 31, Year 1 [if any] …If none, so state
In Year 2, all employees received a 10% pay raise effective on August 21, Year 2. No new employees were hired and none left the firm for any reason.
Required:
$_________ Year 2 Salary Expense for these employees
$_________ Prepaid Salaries at Dec. 31, Year 2 [if any] …If none, so state
$________ Salaries Payable at Dec. 31, Year 2 [if any] …If none, so state

Answer 1

Year 1 Salary Expense for these employees	$ 154,700.00
Prepaid Salaries at Dec. 31, Year 1	$                   -
Salaries Payable at Dec. 31, Year 1	$      7,700.00

Year 2 Salary Expense for these employees	$ 261,170.00
Prepaid Salaries at Dec. 31, Year 2	$                   -
Salaries Payable at Dec. 31, Year 2	$      8,470.00

*=3,000x7x7+ 3000/30*11*7= 154,700