Matrix Accounting pays all salaried employees biweekly. Overtime pay, is paid in
ID: 2368938 • Letter: M
Question
Matrix Accounting pays all salaried employees biweekly. Overtime pay, is paid in the next biweekly period. Matrix accrues salary expense only at its Dec 31 year end. Information about salaries earned in Dec 2009 is as follows:• Last payroll was paid on Dec 28, 2009 for the two week period ended Dec 28,2009.
• Overtime pay earned in the two week period ended Dec 28, 2009, was $7,500.
• Remaining workdays in 2009 were Dec 29, 30, 31; no overtime was worked on these days.
• The regular bi-weekly salaries total $125,000.
Using a five-day workweek, what will Matrix’s balance sheet show as salaries payable on Dec 31, 2009?
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Explanation / Answer
There are 5 days in each work week, so there are 10 days in each pay period. The regular biweekly payroll is $125,000, so the payroll for each day is 125,000/10 = $12,500 per day. Three days will be accrued at the end of the year: December 29, 30, and 31, and they total 12,500*3 = $37,500. The balance sheet will show: Salaries payable 37,500