Concept explainers
Journalizing reversing entries
Ocean View Services had the following unadjusted balances at December 31, 2016: Salaries Payable, $0; Salaries Expense, $ 1,400. The following transactions have taken place at the end of 2016 and beginning of 2017:
2016 | |
Dec. 31 | Accrued Salaries Expense at December 31, $3,000. |
31 | Closed the Salaries Expense account. |
2017 | |
Jan. 1 | Reversed the accrued salaries . (Requirement 3 only) |
4 | Paid salaries of $4,400. This payment included the Salaries Payable amount, plus $1,400 for the first few days of January. |
Requirements
1. Open T-accounts for Salaries Payable and Salaries Expense using their unadjusted balances at December 31, 2016.
2.
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, 2016. Journalize the entries assuming Ocean
View Services uses reversing entries. Don’t forget to record the reversing entry on
Jan. 1. Post to the accounts. Compare the balances with Requirement 2 balances.
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Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
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