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3 September, 20:18

Chase Company has 10 employees, who earn a total of $3,400 in salaries each working day. They are paid on Monday for the five-day work week ending on the previous Friday. Assume that year ended on December 31, which is a Wednesday, and all employees will be paid salaries for five full days on the following Monday. The adjusting entry needed on December 31 is:

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  1. 3 September, 20:37
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    The adjusting entry is shown below:

    Salaries expense A/c $10,200

    To Salaries payable A/c $10,200

    (Being salary is adjusted)

    The salaries expense is computed by

    = Total salary each day * number of days

    = $3,400 * 3 days

    = $10,200

    The 3 days is computed from Monday to Wednesday

    And for correct posting, we debited the salaries expense account and credited the salaries payable account
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