Question

Wages are $37,500 per week for a five-day workweek, ending on Friday. The last payday of the year was Friday, June 26. Which of the following is correct for the reversing entry on July 1?(A) debit Salaries Expense for S15,000(B) credit Salaries Payable for $15,000(C) debit Salaries Payable for $37,500(D) credit Salaries Expense for $15,000

Answer 1

(D) credit Salaries Expense for $15,000

Step-by-step explanation:

The normal entry to record adjusting entry of an expense is shown below:

Salary expense A/c Dr XXXXX

To Salary payable A/c XXXXX

(Being salary expense is adjusted)

And, the reversal entry would be

Salary payable A/c Dr $15,000

To Salary expense A/c $15,000

(Being reversal entry is passed)

The computation is shown below:

= $37,500 × 2 days ÷ 5 days

= $15,000