Adjustment for Accrued Expenses Example Exercise 3-6 Adjustment for Accrued Expenses We need to determine the amount of the adjusting journal entry for accrued wages during the current accounting period.

Adjustment for Accrued Expenses Example Exercise 3-6 Adjustment for Accrued Expenses payday of $12,500 Sanregret pays weekly salaries of $12,500. Since their year-end is on a Thursday this year, only four days [CLICK] of salaries apply to the current period. Therefore, we need to determine how much of the expense to apply for Monday through Thursday of that week. To determine this, divide the total weekly amount of $12,500 by five days to get $2,500 [CLICK] of salaries per day for their employees and multiply it by four days to get the amount of the adjusting journal entry, which is $10,000 [CLICK]. ÷ 5 = $2,500 per day X 4 = $10,000

Adjustment for Accrued Expenses Example Exercise 3-6 Adjustment for Accrued Expenses [($12,500 ÷ 5) X 4 days]. The adjusting entry includes a debit to Salaries Expense for $10,000 and a credit to Salaries Payable for $10,000 for the expenses accrued during the period. Note that the remaining amount, $12,500 less $10,000, or $2,500 will become an expense in the following period.

Assets = Liabilities + Owner’s Equity Example Exercise 3-6 Adjustment for Accrued Expenses Assets = Liabilities + Owner’s Equity The Salaries Expense account has a debit balance of $10,000 which represents the salaries accrued during the period and is an expense of the current period.

Example Exercise 3-6  For Practice: PE 3-6A, PE 3-6B Refer to Practice Exercise PE 3-6A and PE 3-6B for adjustments for accrued expenses.  For Practice: PE 3-6A, PE 3-6B