[jamesk486]

Taylor Company had a salaries payable balance of $18,000 on December 31, 2004. During 2005, it paid $50,000 in cash as salaries, and recorded a salary expense of $50,000. Its December 31, 2005 salaries payable balance is:
A. $100,000
B. $50,000
C. Cannot be determined from the information provided
D. $18,000

I chose C (answer is incorrect), there needs to be more information but perhaps it could be D? 18,000-50,000+50,000= 18000

[morgaine300]

There's different ways of looking at this. I just looked at it like a cash flow. The difference in a payable balance is the difference between the expense and what cash actually happened. If the cash and expense are the same, the payable would not have changed.

You can look at it like entries. The 50,000 of salary would have done this:
Dr. Salaries Payable 18,000
Dr. Salaries Expense 32,000
Cr. Cash 50,000

The payable portion would have been paid first and the rest has to be expense.

But a total of 50,000 got charged to expense - new salary. But only 32,000 of new salary got paid in cash. So the rest had to have gone back into the payable at year-end.

[jamesk486]

So salaries payable is 18,000?

[morgaine300]

Yes.