Cathy Cline's Salary Adjustment at Merlin Company
Cathy Cline's Salary Adjustment at Merlin Company
Cathy Cline, an employee of Merlin Company, will not receive her paycheck until April 2. Based on services performed from Mach 16 to March 31, her salary was $900. The adjusting entry for Merlin Company of March 31 includes ________.
Final answer:
Merlin Company must record an adjusting entry for accrued salaries of $900 on March 31 for Cathy Cline's salary earned from March 16 to March 31, debiting Salaries Expense and crediting Salaries Payable.
Explanation:
The adjusting entry for Merlin Company on March 31 would include accrued salaries for Cathy Cline. This is because she earned a salary from March 16 to March 31 but will not receive her paycheck until April 2. Therefore, Merlin Company must recognize the expense and the corresponding liability for this period.
To record this adjusting entry, the company should debit the Salaries Expense account and credit the Salaries Payable account for the amount of $900. This entry reflects that Merlin Company incurred salary expenses for the second half of March, even though the payment to Cathy Cline will be made in the following month.