[NinaSun]

Rice Co. salaried employees are paid biweekly. Advances made to employees are paid back by payroll deductions. Information relating to salaries follows:

12/31/Year1 12/31/Year2

Employee Advances $24,000 $36,000

Accrued Salaries Payable 40,000 ?

Salaries Expense During the Year 420,000

Salaries Paid During the Year (Gross) 390,000

In Rice’s December 31, Year 2, balance sheet, accrued salaries payable was:

a. $30,000

b. $82,000

c. $70,000

d. $94,000

The answer is “c”. I think the year end Employee Advances should deduct the payroll of next year. So my answer is “b”. 40,000+420,000-(390,000-36,000)-24,000=82,000. Can anyone explain why I am wrong. Is it always Employee Advances deduct payroll for the same year? Thanks

AUD-74,75 11/2014
REG-80 04/2015
FAR-74, 91 11/2015
BEC-79 08/2015