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General Accounting Discussions: accured salaries, journal entry

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  1.  
    • CommentAuthormfedak78
    • CommentTimeMay 21st 2008
     
    My question centers around accruing salaries properly when the pay period starts in the current month, but ends into the next month.

    Eg. Company has a 14 day pay period. Salaries earned total 10000 that cover Feb. 17 to March 2.

    This is my assumption of the correct JE. Is this correct??? Thanks.

    Februrary
    Salary Expense 8600
    Cash 8600

    Salary Expense 1400
    Salary Payable 1400
    March
    Salary Payable 1400
    Cash 1400
  2.  
    There is no cash paid in February if the payroll ends on March 2nd. The accrual should be for the 12 days in February and the payment of wages occurs in March. You should be able to finish off.
    Thankful People: mfedak78, lorelee
    • CommentAuthorRukh
    • CommentTimeMay 30th 2008
     
    I believe we will make accrued entry in Feb for 14 day period in Feb and in March reverse the entry and make a new entry in March
    February

    Salary expense 8600
    Salary payable 8600

    March

    Salary payable 8600
    salary expense 8600

    salary expense 10000
    salary payable 10000

    salary payable 10000
    Bank 10000

    Is this right nbcruncher
    • CommentAuthorlee
    • CommentTimeMay 30th 2008 edited
     
    from carrie:
    you should,
    february 28:
    dt: salary expense 8600
    ct: salary payable 8600

    march 2 :
    dt: salary expense 1400
    : salary payable 8600
    ct: cash/bank 10000
    Thankful People: mfedak78, lorelee
    • CommentAuthorlorelee
    • CommentTimeMay 30th 2008
     
    lee is correct. The only JV needed is for February expense. The payable account is per se' a clearing account only and cash is not affected until March
    • CommentAuthorlorelee
    • CommentTimeMay 30th 2008
     
    Thanks nbcruncher for your very accurate statements

1 to 6 of 6

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