Victor has two employees who each get paid $150/day. December 31st is a Wednesday. These two employees will not be paid until Friday, January 2nd. How much do i debit to salary expense and how much do i credit to salary payable?
To calculate the amount you need to debit to salary expense and credit to salary payable, you need to determine the number of days the employees worked in December and the number of days they will be paid in January.
Step 1: Determine the number of days the employees worked in December:
Since December has 31 days, you need to subtract the weekend days from the total. In this case, December 31st is a Wednesday, there are two weekend days (Saturday and Sunday) remaining in December.
Number of working days in December = Total days in December - Number of weekend days
= 31 - 2
= 29
Step 2: Calculate the payment for the number of days worked in December:
Each employee gets paid $150 per day, so the total payment for both employees for a single day is:
$150 * 2 = $300
Total payment for the number of days worked in December = Total payment per day * Number of working days in December
= $300 * 29
= $8,700
Step 3: Determine the amount to be debited to salary expense and credited to salary payable:
Since the payment will be made in January, you need to credit the salary payable account for the amount owed.
Debit amount (salary expense) = Total payment for the number of days worked in December
= $8,700
Credit amount (salary payable) = Total payment for the number of days worked in December
= $8,700
Therefore, you will debit $8,700 to the salary expense account and credit $8,700 to the salary payable account.