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Chapter 4: 7TI-3 (page 208)

Winters Landscape Services accrued \(4,000 of Salaries Expense at December 31. Winters paid the next payroll at January 10 of

\)6,000. This payment included the accrued amount at December 31, plus $2,000 for the first few days of January.

25A. Journalize the cash payment

Short Answer

Expert verified

Journal entry is as follows:

Date

Accounts and Explanation

Debit

Credit

Jan. 10

Salaries Expense

$6,000

Cash

$6,000

To record payment of salaries

Step by step solution

01

Explanation on Salaries Expense

Salaries expense indicates the total cost incurred on the labor part of the total business process.

02

Explanation on Reversal Entry

Cash payment of salaries will be recorded by debiting salary expense and crediting cash by $6,000, respectively.

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Most popular questions from this chapter

For each account listed, identify whether the account would appear in either the income statement section or the balance sheet section of the worksheet. Assuming normal balances, identify if the account would be recorded in the debit (DR) or credit (CR)

column.

Depreciation Expense—Building

For each account listed, identify whether the account would appear on the post-closing trial balance. Indicate either yes or no.

18. Cash

The adjusted trial balance of Melanie O’Mallie Dance Studio Company follows:MELANIE O'MALLIE DANCE STUDIO COMPANY Trial Balance August 31, 2018 Account Title Prepaid Rent Cash Debit Credit Office Supplies Equipment Accumulated Depreciation—Equipment Accounts Payable Salaries Payable Unearned Revenue Notes Payable (long-term) Dividends Common Stock Retained Earnings Service Revenue Salaries Expense Rent Expense Depreciation Expense—Equipment Supplies Expense Utilities Expense Balance \( 16,000 \) 76,100 \( 76,100 100 \) 5,700 4,800 49,000 5,400 18,100 5,000 18,000 19,000 1,100 1,100 3,600 1,800 1,500 500 400 1,100 Requirements 1. Prepare the classified balance sheet of Melanie O’Mallie Dance Studio Company at August 31, 2018. Use the report form. You must compute the ending balance of Retained Earnings. 2. Compute O’Mallie’s current ratio at August 31, 2018. One year ago, the current ratio was 1.76. Indicate whether O’Mallie’s ability to pay current debts has improved, deteriorated, or remained the same.

Question:Refer to the Practice Set data provided in Chapters 2 and 3 for Crystal Clear Cleaning.

Requirements

1. Prepare a worksheet (optional) at November 30, 2018. Use the unadjusted trial balance from Chapter 2 and the adjusting entries from Chapter 3.

2. Prepare an income statement and statement of retained earnings for the month ended November 30, 2018. Also prepare a classified balance sheet at November 30, 2018, using the report format. Assume the Notes Payable is long-term. Use the worksheet prepared in Requirement 1 or the adjusted trial balance from Chapter 3.

3. Prepare closing entries at November 30, 2018, and post to the accounts. Open T-accounts for Income Summary and Retained earnings. Determine the ending balance in each account. Denote each closing amount as Clos. and each account balance as Balance.

4. Prepare a post-closing trial balance at November 30, 2018.

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.
See all solutions

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