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    Adjusting entries

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    P2-4A A review of the ledger of Greenberg Company at December 31, 2002, produces the
    following data pertaining to the preparation of annual adjusting entries.
    1. Salaries Payable $0. There are eight salaried employees. Salaries are paid every Friday for
    the current week. Five employees receive a salary of $750 each per week, and three employees
    earn $500 each per week. December 31 is a Tuesday. Employees do not work weekends.

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    Solution Preview

    1. Salaries Payable

    The total salary is 750X5+500X3=$5,250 per week ( for 5 days). Dec 31 is a tuesday, so we need to account for 2 days of salary. This is 5250/5 X 2 =$2,100
    The adjusting entry is
    Salary Expense Dr 2,100
    Salalry Payable Cr 2,100

    2. The Nov 1 contract has run for 2 months ...

    Solution Summary

    The solution explains how to make the adjusting journal entries based on the period end details.