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Chegg Study Guided S: × re | https://newconnect.mheducation.com/flow/connect.html 2 Exercise 11-1A Employee compensation-Asset or expense LO 11-1 Walton Company started year 2 with $110,000 in its cash and common stock accounts. During year 2 Walton paid s employee compensation. Assume this is the only transaction that occurred in year 2 Requirea a. Determine the total amount of assets at the end of year 2, assuming Walton is a manufacturing company and the employees were pald to make products. b. Determine the amount of expense recognized c. Determine the total amount of assets at the end of year 2, assuming Wailton is a service company. d. Determine the amount of expense recognized on the year 2 income stotement. assuming Walton is a service company on the year 2 income statement, assuming Walton is a manufacturing company and t the employees were paid to make products Total assets

Explanation / Answer

A)Total asset at end of year 2 :110000-82500= 27500

B)

Expense to recognised = 0 SInce wages paid will be added to cost of product which is charged to income statement only at a time when product is sold .

C)Asset :27500

D)Expense to recognise : 82500      [cost of services provided ]

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