I need help with the following Accounting problem:
Annual Adjustments - Palmer Industries prepares annual financial statements and adjusts its accounts only at the end of the year. The following information is available for the year ended December 31, 2014:
f) Palmer operates five days per week with an average daily payroll of $500. Palmer pays its employees every Thursday. December 31,2014 is a Wednesday.
- Fore the preceding situation, identify and analyze the adjustment to be recorded on December 31, 2014.
- Assume that Palmer's accountant forgets to record the adjustments on December 31, 2014. Will net income for the year be understated or overstated? by what amount? (Ignore the effect of income taxes.)
Thank you for your help!
1) a debit to salaries expense and a credit... View the full answer