During 2012, Transit Airlines paid salary expense of $42.4 million. At December 31, 2012, Transit accrued salary

Question:

During 2012, Transit Airlines paid salary expense of $42.4 million. At December 31, 2012, Transit accrued salary expense of $2.2 million. Transit then paid $2.2 million to its employees on January 3, 2013, the company’s next payday after the end of the 2012 year. For this sequence of transactions, show what Transit would report on its 2012 income statement and on its at the end of 2012.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...