Mandalay Company Frequently Has Accrued Expenses at the End of Its

Essay

Mandalay Company frequently has accrued expenses at the end of its fiscal year that should be recorded for proper financial statement presentation. Mandalay pays on a weekly basis and has
$50,000 of accrued salaries incurred but not paid for June 30, its fiscal year-end. This consists of one day's accrued salaries for the week. The company will pay its employees $250,000 on July 4; the one day of accrued salaries and the remaining four days for July salaries. Record the following entries:
(a) Accrual of the salaries on June 30.
(b) Payment of the salaries on July 4, assuming that Mandalay does not prepare reversing entries.
(c) Assuming that Mandalay prepares reversing entries, reverse the adjusting entry made on June 30.
(d) Assuming that Mandalay prepares reversing entries, payment of the salaries on July 4.