Wages are $37,500 per week for a five-day workweek, ending on Friday. The last payday of the year was Friday, June 26. Determine the balance in Salaries Expense on July 1 after reversing entries have been journalized and posted to the ledger.
A) credit balance of $15,000
B) debit balance of $37,500
C) debit balance of $15,000
D) credit balance of $7,500

Question

Quizplus · Accepted Answer

The last payday of the year was Friday, June 26, so the last day of the workweek was June 26. The next payday is July 3, so the first day of the workweek is July 3. Therefore, there are 5 days in the workweek ending on June 26 and 2 days in the workweek ending on July 3. The total wages expense for the week ending on June 26 is $37,500, and the total wages expense for the week ending on July 3 is $15,000. The reversing entry will debit Salaries Expense for $37,500 and credit Salaries Payable for $37,500. The adjusting entry will debit Salaries Expense for $15,000 and credit Salaries Payable for $15,000. Therefore, the balance in Salaries Expense on July 1 after reversing entries have been journalized and posted to the ledger is a credit balance of $15,000.

Wages Are $37,500 Per Week for a Five-Day Workweek, Ending