O'Bryan Company began the year with a balance of $18,000 in Salaries and Wages Payable and ended the year with $11,000 in the account.Salaries and Wages Expense for the period amounted to $91,000.Under the direct method,O'Bryan will report cash payments for salaries and wages of
A)$84,000.
B)$102,000.
C)$109,000.
D)$98,000.

Question

Quizplus · Accepted Answer

To calculate the cash payments for salaries and wages under the direct method, we need to adjust the change in the Salaries and Wages Payable account. 
Change in Salaries and Wages Payable = Beginning balance - Ending balance = $18,000 - $11,000 = $7,000 (decrease)
Cash payments for salaries and wages = Salaries and Wages Expense + Decrease in Salaries and Wages Payable 
Cash payments for salaries and wages = $91,000 + $7,000 = $98,000 
Therefore, the answer is D.

O'Bryan Company Began the Year with a Balance of $18,000