Chapter 2, Problem 2.21E

Reversing entries

• Appendix 2B

The employees of Xitrex, Inc., are paid each Friday. The company’s fiscal year-end is June 30, which falls on a Wednesday for the current year. Salaries and wages are earned evenly throughout the five-day work week, and $10,000 will be paid on Friday, July 2.

Required:

1. Prepare an adjusting entry to record the accrued salaries and wages as of June 30, a reversing entry on July 1, and an entry to record the payment of salaries and wages on July 2.

2. Prepare journal entries to record the accrued salaries and wages as of June 30 and the payment of salaries and wages on July 2 assuming a reversing entry is not recorded.