Question 13BE
Question
BE3-13 (L08) Assume that Best Buy made a December 31 adjusting entry to debit Salaries and Wages Expense and credit Salaries and Wages Payable for \(4,200 for one of its departments. On January 2, Best Buy paid the weekly payroll of \)7,000. Prepare Best Buy’s (a) January 1 reversing entry; (b) January 2 entry (assuming the reversing entry was prepared); and (c) January 2 entry (assuming the reversing entry was not prepared).
Step-by-Step Solution
VerifiedSalary and wages expense amount is $7,000.
Journal entries posted at the initiation of the financial year to rescind the impact of adjusting entries of the previous year is known as reversing entries. It helps in the continuity of accounting.
Date | Accounts and Explanation | Debit $ | Credit $ |
January, 1 | Salaries and Wages Payable | $4,200 |
|
| Salaries and Wages Expenses |
| $4,200 |
|
|
|
|
January, 2 | Salary and Wages Expenses | $7,000 |
|
| Cash |
| $7,000 |
|
|
|
|
January, 2 | Salary and Wages Payable | $4,200 |
|
| Salary and Wages Expenses | $2,800 |
|
| Cash |
| $7,000 |
|
|
|
|