For Each of the Following Two Separate Situations, Present Both

question 48

Essay

For each of the following two separate situations, present both the April 30 adjusting entry and the subsequent entry during May to record the payment of the accrued expenses or receipt of the accrued revenue. Assume the company does not prepare reversing entries.
a. Nicolas Company has 5 employees, who earn a total of $2,900 in salaries each working day. They are paid on Monday for the five-day workweek ending on the previous Friday. Assume that fiscal year ended April 30, is a Thursday and all employees worked each day and will be paid salaries for five full days on the following Monday.
b. Services of $3,000 have been performed for Clevenger Company through April 30. The client will pay the entire amount of the contract when services are completed on May 23.
c. Paid the employees' salaries on May 4.
d. Received payment from Clevenger Company for services that are now completed on May 23.

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Definitions:

Goods and Services

The physical items (goods) and activities or benefits (services) that are produced and provided to satisfy consumers' needs and wants.

Demand for Cars

Demand for Cars represents consumers' desire and ability to purchase cars, influenced by factors such as price, income levels, and personal preferences.

Short Run

A period during which at least one of a firm's inputs is fixed and cannot be changed.

Long Run

A period in economics where all factors of production and costs are variable, and firms can adjust all inputs according to market demands.