Problem 1: Pratt/Julian Barbeque is a small restaruant in Columbia, Missouri. They employ four part time employees earning $48 each per day.
Their employees are paid every Friday and the financial statements of the business are prepared at the end of each month. The business is only open Monday through Friday to serve the nearby factory workers during their lunch breaks.
This year June 30 fell on a Thursday and the financial statements were prepared as normal. Would Pratt/Julian need to prepare any adjusting entries regarding the part-time employees' payroll, and if so for how much?
Answer:
A. Absolutely not, Pratt/Julian should prepare payroll checks up through the Thursday month end date and then process a smaller payroll check on Friday for one day's wages.
B. Absolutely, Pratt/Julian need to record an adjusting entry for the last four working days of the month in the amount of $768 as an accrual, showing that the amount is owed to employees even though it will be paid the next day.
C. Absolutely, an adjustment for $352 needs to be recorded for the June month end.
D. None of the other answers
E. Absolutely not, the month end is close enough to the actual payroll date (Friday) that an adjustment for the month end isn't needed.
Problem 2.) Which of the following transactions would be recorded in a Purchases Journal?
Answer:
A. Issued $1,225 check for monthly electricity payment.
B. Bought $640 worth of office supplies from Bexar Office Wholesaler on account.
C. Accepted a $214 cash payment from a client stopped in to make an in-store payment.
D. Issued a check of $175 to Squeeky-Clean window washers