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Frisco Management has nine part-time employees, each of whom earns $220 per day. They are normally paid on Fridays for work completed Monday through Friday of the same week. They were paid in full on Friday, December 28, 2005. The next week, the nine employees worked only four days because New Year's Day was an unpaid holiday.
Problem 1: Show the adjusting entry that would be recorded on Monday, December 31, 2005, and the journal entry that would be made to record payment of the employees' wages on Friday, January 4, 2006
The common fixed expenses were $40,000 and operating income for the flipflop company was $30,000. The segment margin for the flip division was
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