/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} 8BE Mayaguez Corporation provides it... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 13: 8BE (page 658)

Mayaguez Corporation provides its officers with bonuses based on net income. For 2017, the bonuses total $350,000 and are paid on February 15, 2018. Prepare Mayaguez鈥檚 December 31, 2017, adjusting entry and the February 15, 2018, entry.

Short Answer

Expert verified

On December 31, 2017, salaries and wages expenses will be debited and salaries and wages payable will be credited by $350,000, respectively.

On February 15, 2018, salaries and wages payable will be debited and cash will be credited by $350,000, respectively.

Step by step solution

01

Explanation on salaries and wages payable

Salaries and wages payable are the accrued expenses related to salaries, wages, or bonuses, which will be paid in the future. It is reported as a current liability.

02

Journal entries

Date

Accounts & Explanations

Debit

Credit

Dec.31,2017

Salaries and Wages Expense

$350,000

Salaries and Wages Payable

$350,000

To record accrued bonuses

Feb.15, 2018

Salaries and Wages Payable

$350,000

Cash

$350,000

To record payment of bonuses

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 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

A typical provision is:

(a) bonds payable (c) a warranty liability

(2) cash (d) accounts payable

Under what conditions is an employer required to accrue a lability for sick pay? Under what conditions is an employer permitted but not required to accrue a liability for sick pay?

(a) Assuming no Fair Value Adjustment account balance at the beginning of the year, prepare the adjusting entry at the end of the year if Laura Company鈥檚 available-for-sale debt securities have a fair value of \(60,000 below cost.

(b) Assume the same information as part (a), except that Laura Company has a debit balance in its Fair Value Adjustment account of \)10,000 at the beginning of the year. Prepare the adjusting entry at year-end.

Define (a) a contingency and (b) a contingent liability.

EXCEL (Equity Securities Entries and Disclosures) Parnevik Company has the following securities in its

investment portfolio on December 31, 2017 (all securities were purchased in 2017): (1) 3,000 shares of Anderson Co. common

stock which cost \(58,500, (2) 10,000 shares of Munter Ltd. common stock which cost \)580,000, and (3) 6,000 shares of King Company

preferred stock which cost \(255,000. The Fair Value Adjustment account shows a credit of \)10,100 at the end of 2017.

In 2018, Parnevik completed the following securities transactions.

1. On January 15, sold 3,000 shares of Anderson鈥檚 common stock at \(22 per share less fees of \)2,150.

2. On April 17, purchased 1,000 shares of Castle鈥檚 common stock at \(33.50 per share plus fees of \)1,980.

On December 31, 2018, the market prices per share of these securities were Munter \(61, King \)40, and Castle $29. In addition, the

accounting supervisor of Parnevik told you that, even though all these securities have readily determinable fair values, Parnevik

will not actively trade these securities because the top management intends to hold them for more than one year.

Instructions

(a) Prepare the entry for the security sale on January 15, 2018.

(b) Prepare the journal entry to record the security purchase on April 17, 2018.

(c) Compute the unrealized gains or losses and prepare the adjusting entry for Parnevik on December 31, 2018.

(d) How should the unrealized gains or losses be reported on Parnevik鈥檚 income statement and balance sheet?
See all solutions

Recommended explanations on Business Studies Textbooks

Business Case Studies

Read Explanation

Business Operations

Read Explanation

Finance Literacy (Business Studies)

Read Explanation

Business Data Analytics

Read Explanation

Strategy

Read Explanation

Accounting

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.