Hi all,
I have a question regarding the effect of payroll bonus on the balance sheet.
I was given an excel model, where it debit the bonus expense every month ($50,000, a month from Jan to Dec). In the question, it also stated that a total of $600,000 bonus is paid in June.
There was not any initial balance of accrued bonus on the balance sheet.
How would you guys approach this? Is it correct to assume that the bonus is from May to June? And there would be an initial balance of $300,000 on Jan 1st. When June comes around, the accrued bonus is debit down to 0. After June, accrued bonus is credit every month with respect to the bonus expense?
I have a question regarding the effect of payroll bonus on the balance sheet.
I was given an excel model, where it debit the bonus expense every month ($50,000, a month from Jan to Dec). In the question, it also stated that a total of $600,000 bonus is paid in June.
There was not any initial balance of accrued bonus on the balance sheet.
How would you guys approach this? Is it correct to assume that the bonus is from May to June? And there would be an initial balance of $300,000 on Jan 1st. When June comes around, the accrued bonus is debit down to 0. After June, accrued bonus is credit every month with respect to the bonus expense?