Eaton should record a liability for accrued salaries


Question: Eaton Co. pays its salaried employees on a biweekly basis. Overtime pay is paid in the next pay period. Eaton accrues salaries expense only at its December 31 year end. The following information is available: Last payroll was paid on 12/25/15, for the 2-week period ended 12/25/15. Overtime pay earned in the 2-week period ended 12/25/15 was $15,000. Remaining work days in 2015 were December 28, 29, 30, 31, on which days there was no overtime. The recurring biweekly salaries are $250,000. Assuming a five-day workweek, Eaton should record a liability at December 31, 2015 for accrued salaries of Select one: A. $215,000 B. $200,000 C. $115,000 D. $100,000

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Accounting Basics: Eaton should record a liability for accrued salaries
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