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31 July, 19:43

Zoey Bella Company has a payroll of $10,000 for a five-day workweek. Its employees are paid each Friday for the five-day workweek. Required: Prepare the adjusting entry on December 31 assuming the year ends on Thursday. Refer to the Chart of Accounts for exact wording of account titles.

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  1. 31 July, 22:01
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    Dr. Cr.

    Salaries Expense $8,000

    Salaries payable $8,000

    Explanation:

    Four days of the week passed until December 31. So, the accrued expense will be as follow:

    Payroll for 5 days = $10,000

    Payroll for 1 days = $10,000 / 5 = $2,000

    Payroll for 4 days = $2,000 x 4 = $8,000

    Accrued Expense of $8,000 should be recorded and a liability will be made against this expense as payment has not been made.
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