United Company has experienced a decline in its employee base from 500 in the final month of 2025 to 200 in the final month of 2026. The weekly payroll also decreased from $1,000,000 to $400,000 for the noted periods. Payroll is paid weekly every Friday for the current week. December 31, 2025 was a Monday, and December 31, 2026 is Friday. What conclusion can be drawn with respect to the salaries and wages liability from December 31, 2025 to December 31, 2026? O The salaries and wages liability at December 31, 2026 will be the same. The salaries and wages liability at December 31, 2026 must be greater. O The salaries and wages liability at December 31, 2026 must be less. O It depends on the expectation regarding January 2027 salaries.
United Company has experienced a decline in its employee base from 500 in the final month of 2025 to 200 in the final month of 2026. The weekly payroll also decreased from $1,000,000 to $400,000 for the noted periods. Payroll is paid weekly every Friday for the current week. December 31, 2025 was a Monday, and December 31, 2026 is Friday. What conclusion can be drawn with respect to the salaries and wages liability from December 31, 2025 to December 31, 2026? O The salaries and wages liability at December 31, 2026 will be the same. The salaries and wages liability at December 31, 2026 must be greater. O The salaries and wages liability at December 31, 2026 must be less. O It depends on the expectation regarding January 2027 salaries.
Chapter17: The Management Of Cash And Marketable Securities
Section: Chapter Questions
Problem 7P
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