Analyzing and Computing Accrued Wages Liability and Expense

Demski Company pays its employees on the $1$st and $15$th of each month. It is March $31,$ and Demski is preparing financial statements for this quarter. Its

employees have earned $$40,000$ since the $15$ th of this month and have not yet been paid. How will Demski's balance sheet and income statement change

to reflect the accrual of wages that must be made at March $31?$ What balance sheet and income statement accounts would be incorrectly reported if

Demski failed to make this accrual $($for each account indicate whether it would be overstated or understated$)?$

The company must accrue $

of wages on March $31.$ The accounting accrual will:

Failure to make this accounting accrual $($called an adjusting entry$)$ would

$$ liabilities,

$$ expenses

income, and

stockholders' equity.