Question

Dec 31At December 31, 2019, P230,000 of the salaries have accrued. Assuming that payday is onJanuary 4, 2020 and P620,000 in salaries were paid on that date.

Required:

1.Assume that the transacons were inially recorded in the balance sheet accounts, record theadjusng entries. Also, record the January 4, 2020payment of salaries.

2.Now, assume that these transacons were inially recorded in income statement accounts,record the adjusng entries. Also, record the January 1, 2020 reversing entry and January 4,2020 payment of salaries.

Answer 1

1. Adjusting entries assuming transactions were initially recorded in the balance sheet accounts are as follows:

Salaries expenses=Cash A\C-salaries payable

=D7-C6

=P620,000-P230,000=P390,000

2. Adjusting and reversal entries assuming transactions were initially recorded in the income statement are as follows: