Illustration: Kasten Inc. provides paid vacations to its employees. At December 31, 2019, 30 employees have each earned 2 weeks of vacation time. The employees' average salary is $500 per week. Kasten does not accrue based on future salary rates. Employees can accrue a maximum of 4 weeks vacation after which any additional days earned are lost. Unused vacation days can be carried over to the following year. (a) Prepare Kasten's December 31, 2019, adjusting entry.

Salaries and Wages Expense	30,000
Salaries and Wages Payable		30,000
(30 X 2 X $500)

Illustration cont: Assume that salaries go up in 2020 to $550 per week. During 2020, employees used 50 of the 60 weeks of vacation accrued in 2019. Employees earned an additional 2 weeks vacation as of 12/31/20. (b) Prepare Kasten's December 31, 2020, adjusting entry. Salaries Payable 25,000 (50 weeks*500) Cash 25,000 Salaries Expense 35,500* Salaries Payable 33,000

Cash 2,500

*(50wks * $50 difference in salary) + (60 new wks* $550)= $35,500

The right answer is shown above. Can anyone explain why there's 50 Wks * $50 ? Explain the last adjusting entry