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Homework answers / question archive / Whaitlynal Inc
Whaitlynal Inc. manufactures bird baths and annually pays its workers $57 million dollars. Employees are paid every two weeks on Friday afternoon. The books were closed Tuesday after the most recent payday. Assume the employees work 5 days a week and are paid for 50 weeks a year. How much is the amount of the payroll accrual?
The Books are closed on Tuesday , after the payroll payment made on Friday.
so the Payroll expenses need to be provided for Monday and Tuesday ,i.e.2 days
we need to find the Payroll Expense per day
No. Of work days = employee work days in a week * weeks a year
= 5 * 50
= 250 Days
Pay roll expense per day = Annual Pay roll expense / No. Of work days
= 57000000 / 250
= $228,000 Per day
Accrual is required for 2 days
so Accrual of Pay roll expense = 228000 * 2
= $456,000
