The following balances have been excerpted from Edwards' balance sheets: Edwards Company paid or collected during 2013 the following items:
The salary expense on the income statement for 2013 was
A) $366,500.
B) $472,500.
C) $489,500.
D) $595,500.

Question

The following balances have been excerpted from Edwards' balance sheets:  Edwards Company paid or collected during 2013 the following items:
 The salary expense on the income statement for 2013 was
A) $366,500. 
B) $472,500. 
C) $489,500. 
D) $595,500.

Quizplus · Accepted Answer

To find the salary expense for 2013, we need to look at the change in the salaries payable account from the beginning to the end of the year. The balance in the account increased from $20,000 to $27,000, which means that Edwards Company incurred $7,000 of salary expense that was not paid by the end of the year. To find the total salary expense, we need to add this amount to the salaries paid during the year, which is $482,500 ($425,000 + $57,500). Therefore, the total salary expense for 2013 was $489,500 (option C).

The Following Balances Have Been Excerpted from Edwards' Balance Sheets