The employees of Curel, Inc get paid every Friday for a 5-day ...

[fagboi]

The employees of Curel, Inc get paid every Friday for a 5-day workweek (Monday through Friday). The total payroll is 6,000 per day of work.
 
  If the accounting period ends on Tuesday of a given week, what adjustment must be made to the company's accounting records?
  A) Increase Salaries payable by 12,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount.
  B) Increase Salaries payable by 12,000 and increase shareholders' equity by recognizing Salaries expense for the same amount.
  C) Decrease Cash by 12,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount.
  D) No adjustment is necessary because there is no expense until the employees are paid on Friday.

Question 2

South Seas reported the following items on its financial statements. Determine the amount of net income. Then calculate the ending balance for retained earnings.
 
  Sales  300,000
   Cost of goods sold 180,000
   Operating expenses 40,000
   Net income ??
   Dividends 2,000
   Beginning retained earnings 30,500

[milbourne11]

Answer to Question 1

A

Answer to Question 2

300,000  180,000 40,000 = 80,000 net income

Beginning retained earnings  30,500
Net income 80,000
Dividends (2,000)
Ending retained earnings 108,500

[fagboi]

YES! Correct, THANKS for helping me on my review

[kjohnson]

Excellent