Q7BE - Intermediate Accounting (Kieso)

Question

(LO2,3) Dresser Company’s weekly payroll, paid on Fridays, totals \(8,000. Employees work 5-days week. Prepare Dresser’s adjusting entry on Wednesday, December 31, and the journal entry to record the \)8,000 cash payment on Friday, January 2.

Step-by-Step Solution

Answer

The total for both debit and credit sides is $12,800.

Step 1: Meaning of the Journal Entry

The journal entry is used to record the business transaction in the accounting system for an organization. In a journal entry, the debits and credit should be equal and at the end of the journal entry.

Step 2: Journal Entries

The adjusting entry on December 31 and the journal entry to record the cash payment on January 2 are as follows:

Journal Entries
Date	Accounts Titles and Explanations	Debit	Credit
Dec 31	Salaries and wages expenses	$ 4,800
	Salaries and wages payable		$4,800
Jan 2	Salaries and wages payable	$ 4,800
	Salaries and wages expenses	$ 3,200
	Cash		$ 8,000

 

Working notes:

Salaries and wages payable = ($ 8,000 × 3/5) = $ 4,800

Salaries and wages expenses = ($8,000- $4,800) = $ 3,200