00:01
Hello, in this video we're going to prepare necessary adjusting entries at the end of the fiscal period.
00:09
So there suppose a business pays weekly salaries of $25 ,000 on friday for a five -day week ending on that day.
00:20
So the problem here is how are we going to adjust our records to show that we still have.
00:33
Have days that are unpaid so let me show you an illustration say for example in the month of say for example in the month of september so i have here sunday monday tuesday wednesday thursday friday saturday so um the company the last pay was on friday so so assuming we have a five -day work week, okay? so assuming in the first scenario that the fiscal period ends on wednesday.
01:22
So since the company pays the employees last friday, so we still have a three days that are unpaid.
01:34
So what are we going to do? we need to adjust our records.
01:38
We need to prepare necessary adjusting.
01:41
Entry so that's three days okay for three days we're going to record salary expense so first let us determine our daily salary okay so for a five -day work or five -day work the company pays the company pays $25 ,000 a week so divided by five days five work days five work days a week so that's equal to 5 ,000 so every day the company pays 5 ,000 that's the daily salary so multiply that by three which is from monday to wednesday and we will get 15 ,000 so this is the answer to the first scenario assuming that the fiscal period ends on wednesday but how about okay this is for number one how about for the second assuming that the company ends or the fiscal period of the company ends on thursday.
02:52
So we'll do the same...