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.com/Im/takeAssignment takeAssignmentMain.do?invoker= assignments&takeAssignmentSessionLocator-assignment; takeBunprogress ement Exer eBook Video Calculator Instructions Journal Entries Reversing Entry Analysis Adjusting, Closing and Reversing Entries 1. Prepare the entries without making a reversing entry. For a compound transaction, if an amount box does not require an entry, eave it blank. If no entry is required, select "No Entry Required" and leave the amount boxes blank or enter "o". 2. Prepare the entries with the use of a reversing entry. If an amount box does not require an entry, leave it blank. If no entry is required, select "No Entry Required" and leave the amount boxes blank or enter "0 3. Use T-accounts to assist your analysis for without making a reversing entry. repare entries for (a), (b), and (c) listed below using two methods. First, prepare the entries without making a reversing entry Second, prepare the entries with the use of a reversing entry. Use T-accounts to assist your analysis. Wages paid during 20-1 are $18,040. o. Wages earned but not paid (accrued) as of December 31, 20-1, are $240 On January 3, 20-2, payroll of $990 is paid, which includes the $240 of wages earned but not paid in DecemberExplanation / Answer
Transactions
Option 1: Entries without reversing entry
1. Wages paid during 20-1 are $18040
Date
Particulars
Debit
Credit
20-1
Dec
Wages Expense a/c Dr
18,040
To Cash a/c
18,040
(wages paid )
2. Wages earned but not paid (accrued) as of December 31, 20-1, are $240
Date
Particulars
Debit
Credit
20-1
Dec
Wages Expense a/c Dr
240
To Accrued Wages a/c
240
(wages accrued but not paid)
3. On January 3, 20-2, payroll of $990 is paid, which includes the $240 of wages earned but not paid in December 20-1
Date
Particulars
Debit
Credit
20-2
Jan 3
Wages Expense a/c Dr
750
Accrued Wages a/c Dr
240
To Cash
990
(payroll expenses paid including accrued wages of December 20-1)
When there is no reverse entry and entry is made as above, the wages expense A/c will appear as follows:
Wages Expense A/c
Date
Particulars
Amount
Date
Particulars
Amount
20-2
20-2
January 3
To Cash
750
January 31
By balance c/d
750
750
750
Option 2: Entries with reverse entry
1. Wages paid during 20-1 are $18040
Date
Particulars
Debit
Credit
20-1
Dec
Wages Expense a/c Dr
18,040
To Cash a/c
18,040
(wages paid )
2. Wages earned but not paid (accrued) as of December 31, 20-1, are $240
Date
Particulars
Debit
Credit
20-1
Dec
Wages Expense a/c Dr
240
To Accrued Wages a/c
240
(wages accrued but not paid)
Reversing entry
Date
Particulars
Debit
Credit
20-2
Jan 1
Accrued Wages a/c Dr
240
To Wages expense a/c
240
(Reversing entry for wages accrued but not paid on December 20-1)
The effect of this reversing entry will give a negative balance in Wages expense a/c in January 20-2
Wages Expense A/c
Date
Particulars
Amount
Date
Particulars
Amount
20-2
January 1
Accrued wages a/c
240
3. On January 3, 20-2, payroll of $990 is paid, which includes the $240 of wages earned but not paid in December 20-1
Date
Particulars
Debit
Credit
20-2
Jan 3
Wages Expense a/c Dr
990
To Cash
990
(payroll expenses paid including wages accrued of December 20-1)
Because of the reversing entry, the Wages expense a/c after paying wages on January 03, 20-2 will appear as follows:
Wages Expense A/c
Date
Particulars
Amount
Date
Particulars
Amount
20-2
20-2
January 3
To Cash
990
January 1
Accrued wages a/c
240
January 31
By balance c/d
750
990
990
Explanation:
Date
Particulars
Debit
Credit
20-1
Dec
Wages Expense a/c Dr
18,040
To Cash a/c
18,040
(wages paid )
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