Assume the weekly payroll of the abbott company is $5,000. december 31, the end of the year, falls on a wednesday and abbott will pay its employee on friday for the full week. what adjusting entry will abbott make on wednesday, december 31 (use five days as a full work week)?

Salary Expense A/c Dr.            $3,000

           To Salary Payable A/c                 $3,000

Since salary will be paid on Friday therefore, liability is recorded as salary payable.

Explanation:

As for the provided details,

The working week consists of 5 working days.

Thus, salary expense will be allocated to these 5 working days only. As the salary expense for a week = $5,000

That means salary expense for a day = $5,000/5 = $1,000 for each day.

Now, the financial year ends on December 31 which is Wednesday.

That means three days, of the working week, fall in the financial year.

Therefore, salary expense for the year will be = $1,000 3 = $3,000

Thus, entry for this will be:

Salary Expense A/c Dr.            $3,000

           To Salary Payable A/c                 $3,000

Since salary will be paid on Friday therefore, liability is recorded as salary payable.

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