7. A Company started year x with salaries payable of $10,000, and ended the same year with salaries payable of $15,000. During the year, the company paid salaries of $125,000. The amount of salaries expense the company reported on its income statement for that year was:
A) $120,000. B) $150,000. C) $130,000. D) $125,000. E) none of the above.
please explain. i figured it out to be 130, but was wrong
2006-10-09 07:00:48 · 1 answers · asked by Diggler AKA The Cab Driver 1 in Business & Finance ➔ Taxes ➔ United States
actually i found it out to be 120
2006-10-09 07:03:49 · update #1
8. A Company started year x with prepaid rent of $25,000, and ended the same year with prepaid rent of $10,000. During the year, the company paid $125,000 for rent. The amount of rent expense the company reported on its income statement for that year was:
A) $140,000. B) $180,000. C) $110,000. D) $125,000. E) none of the above.
i got this problem right. i dont understand what the difference between the two is. i added 25 start to 125 during and subtracted final 10. i did the same for previous problem and came with wrong answer
2006-10-09 07:34:45 · update #2
125,000 Paid and Expensed in Year x
(10,000) Paid in Year x but expensed in Year x-1
15,000 Expensed In Year x but Paid in Year x+1
130,000 Salary Expense per Income Statement
It looks like you were on the right track you just looked at the accruals backwords. Very common mistake.
2006-10-09 07:12:05 · answer #1 · answered by Wayne Z 7 · 1⤊ 0⤋