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Chapter 11: Q9SE (page 605)

On December 31, Weston Company estimates that it will pay its employees a 5% bonus on net income after deducting the bonus. The company reports net income of $64,000 before the calculation of the bonus. The bonus will be paid on January 15 of the next year.Requirements

1. Journalize the December 31 transaction for Weston.

2. Journalize the payment of the bonus on January 15.

Short Answer

Expert verified
  1. Employee bonus expenses is $3,048
  2. Employee bonus payable is $3,048

Step by step solution

01

Bonus

Bonus=(叠辞苍耻蝉%鈥壝椻赌�$64,000)(1+Bonus%)=(0.05脳鈥�$64,000)(1+0.05)=$3,048

02

Journal Entries

Date

Particulars

Debit

Credit

Dec 31

Employee Bonus Expense

$3,048

Employee Bonus payable

$3,048

To record employee bonus expense

Jan,15

Employee bonus payable

$3,048

Cash

$3,048

To record cash payment for employee bonus payable.

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Most popular questions from this chapter

Hugh Stanley manages a Dairy House drive-in. His straight-time pay is \(12 per hour, with time-and-a-half for hours in excess of 40 per week. Stanley鈥檚 payroll deductions include withheld income tax of 20%, FICA tax, and a weekly deduction of \)5 for a charitable contribution to United Way. Stanley worked 58 hours during the week.

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