Determining Accrued Salaries

Bloy Company pays all salaried employees on a biweekly basis. Overtime pay, however, is paid in the following biweekly period. Bloy accrues salaries expense only at its December 31 year-end. Data relating to salaries earned in December 2020 are:

• Last payroll was paid on December 26, 2020, for the two-week period ended on that day.
• Overtime pay earned in the two-week period ended December 26, 2020, was $13,440.
• Remaining work days in 2020 were December 29, 30, and 31, on which days there was no overtime.
• The recurring biweekly salaries total $240,000.

Required

Assuming a 5-day workweek, what should Bloy record as a liability at December 31, 2020, for accrued salaries?

Answer