91Ó°ÊÓ

Mountain View Services had the following unadjusted balances at December 31, 2018:

Salaries Payable, \(0; and Salaries Expense, \)1,900. The following transactions havetaken place at the end of 2018 and beginning of 2019:

2018

Dec. 31 Accrued Salaries Expense at December 31, \(8,000.

31 Closed the Salaries Expense account.

2019

Jan. 1 Reversed the accrued salaries. (Requirement 3 only)

4 Paid salaries of \)8,500. This payment included the Salaries Payable amount,

plus $500 for the first few days of January.

Requirements

1. Open T-accounts for Salaries Payable and Salaries Expense using their unadjustedbalances at December 31, 2018.

2. Journalize the entries assuming Mountain View Services does not use reversing entries. 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, 2018. Journalize the entries assuming Mountain

View Services uses reversing entries. Don’t forget to record the reversing entry on Jan. 1. Post to the accounts. Compare the balances on January 4, 2019 with Requirement 2 balances on January 4, 2019.

Step by step solution

01

Step-by-Step-Solution  Step 1: T accounts

Salaries Expense
Un, Adj, Bal.	$1,900
Bal.	$1,900

Salaries Payable
		$0	Un, Adj, Bal
		$0	Bal.

02

Journal entries and T accounts

(2) Journal entries are as follows:

Date	Accounts and Explanation	Debit	Credit
Dec. 31,2018	Salaries Expense	$8,000
	Salaries Payable		$8,000
	To record accrued salaries expense
Dec. 31,2018	Income Summary	$9,900
	Salaries Expense		$9,900
	To close salaries expense
Jan. 4,2019	Salaries Expense	$500
	Salaries Payable	$8,000
	Cash		$8,500
	To record payment of salaries expense

T accounts are as follows:

Salaries Expense
Un, Adj, Bal.	$1,900
Dec. 31,2018	$8,000
Bal.	$9,900
		$9,900	Clos.2
Bal. Jan.1,2019	$0
	$500
Bal. Jan.4,2019	$500

Salaries Payable
		$0	Un, Adj, Bal
		$8,000	Dec. 31,2018
Jan.4,2019	$8,000	$8,000	Bal. Jan.1,2019
		$0	Bal. Jan.4,2019

03

Step 3: Adjusting Entries Recording and Postings

(3) Adjusting entries are as follows:

Date	Accounts and Explanation	Debit	Credit
Dec. 31	Salaries Expense	$8,000
	Salaries Payable		$8,000
	To record accrued salaries expense
Dec. 31	Income Summary	$8,000
	Salaries Expense		$8,000
	To close salaries expense
Jan.1	Salaries Payable	$8,000
	Salaries Expense		$8,000
	To reverse accrued salaries expense
Jan. 4	Salaries Expense	$8,500
	Cash		$8,500
	To record payment of salaries expense

T accounts are as follows:

Salaries Expense
Un, Adj, Bal.	$1,900
Dec. 31,2018	$8,000
Bal.	$9,900
		$9,900	Clos.2
Bal. Jan.1,2019	$0
		$8,000	Jan.1,2019
Jan.4,2019	$8,500
Bal. Jan.4,2019	$500

Salaries Payable
		$0	Un, Adj, Bal
		$8,000	Dec. 31,2018
		$8,000	Bal. Jan.1,2019
Jan.1,2019	$8,000
		$0	Bal. Jan.4,2019

Unlock Step-by-Step Solutions & Ace Your Exams!

• Full Textbook Solutions

  Get detailed explanations and key concepts

• Unlimited Al creation

  Al flashcards, explanations, exams and more...

• Ads-free access

  To over 500 millions flashcards

• Money-back guarantee

  We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91Ó°ÊÓ!