Q28E
Question
Mountain View Services had the following unadjusted balances at December 31, 2018:
Salaries Payable, \(0; and Salaries Expense, \)1,900. The following transactions havetaken place at the end of 2018 and beginning of 2019:
2018
Dec. 31 Accrued Salaries Expense at December 31, \(8,000.
31 Closed the Salaries Expense account.
2019
Jan. 1 Reversed the accrued salaries. (Requirement 3 only)
4 Paid salaries of \)8,500. This payment included the Salaries Payable amount,
plus $500 for the first few days of January.
Requirements
1. Open T-accounts for Salaries Payable and Salaries Expense using their unadjustedbalances at December 31, 2018.
2. Journalize the entries assuming Mountain View Services does not use reversing entries. Do not record the reversing entry on Jan. 1. Post to the accounts.
3. Open new T-accounts for Salaries Payable and Salaries Expense using their unadjusted balances at December 31, 2018. Journalize the entries assuming Mountain
View Services uses reversing entries. Don’t forget to record the reversing entry on Jan. 1. Post to the accounts. Compare the balances on January 4, 2019 with Requirement 2 balances on January 4, 2019.
Step-by-Step Solution
Verified(1) T accounts are mentioned in Step 1.
(2).Journal entries are recorded in Step 2.
(3) Reversing entries are recorded and posted in Step 3. Balance in both account is same as requirement 2.
Salaries Expense | |||
Un, Adj, Bal. | $1,900 |
|
|
Bal. | $1,900 |
|
|
| Salaries Payable | |||
|
| $0 | Un, Adj, Bal |
|
| $0 | Bal. |
(2) Journal entries are as follows:
Date | Accounts and Explanation | Debit | Credit |
Dec. 31,2018 | Salaries Expense | $8,000 |
|
| Salaries Payable |
| $8,000 |
| To record accrued salaries expense |
|
|
|
|
|
|
Dec. 31,2018 | Income Summary | $9,900 |
|
| Salaries Expense |
| $9,900 |
| To close salaries expense |
|
|
|
|
|
|
Jan. 4,2019 | Salaries Expense | $500 |
|
| Salaries Payable | $8,000 |
|
| Cash |
| $8,500 |
| To record payment of salaries expense |
|
|
|
|
|
|
T accounts are as follows:
Salaries Expense | |||
Un, Adj, Bal. | $1,900 |
|
|
Dec. 31,2018 | $8,000 |
|
|
Bal. | $9,900 |
|
|
|
| $9,900 | Clos.2 |
Bal. Jan.1,2019 | $0 |
|
|
| $500 |
|
|
Bal. Jan.4,2019 | $500 |
|
|
Salaries Payable | |||
|
| $0 | Un, Adj, Bal |
|
| $8,000 | Dec. 31,2018 |
Jan.4,2019 | $8,000 | $8,000 | Bal. Jan.1,2019 |
|
| $0 | Bal. Jan.4,2019 |
(3) Adjusting entries are as follows:
Date | Accounts and Explanation | Debit | Credit |
Dec. 31 | Salaries Expense | $8,000 |
|
| Salaries Payable |
| $8,000 |
| To record accrued salaries expense |
|
|
|
|
|
|
Dec. 31 | Income Summary | $8,000 |
|
| Salaries Expense |
| $8,000 |
| To close salaries expense |
|
|
|
|
|
|
Jan.1 | Salaries Payable | $8,000 |
|
| Salaries Expense |
| $8,000 |
| To reverse accrued salaries expense |
|
|
|
|
|
|
Jan. 4 | Salaries Expense | $8,500 |
|
| Cash |
| $8,500 |
| To record payment of salaries expense |
|
|
T accounts are as follows:
Salaries Expense | |||
Un, Adj, Bal. | $1,900 |
|
|
Dec. 31,2018 | $8,000 |
|
|
Bal. | $9,900 |
|
|
|
| $9,900 | Clos.2 |
Bal. Jan.1,2019 | $0 |
|
|
|
| $8,000 | Jan.1,2019 |
Jan.4,2019 | $8,500 |
|
|
Bal. Jan.4,2019 | $500 |
|
|
Salaries Payable | |||
|
| $0 | Un, Adj, Bal |
|
| $8,000 | Dec. 31,2018 |
|
| $8,000 | Bal. Jan.1,2019 |
Jan.1,2019 | $8,000 |
|
|
|
| $0 | Bal. Jan.4,2019 |