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Demski Company pays its employees on the 1st and 15th of each month. It is...

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Accounting

Demski Company pays its employees on the 1st and 15th of each month. It is March 31, and Demski is preparing nancial statements for this quarter. Its employees have earned $40,000 since the 15th of this month and have not yet been paid.
1. How will Demskis balance sheet and income statement change to reect the accrual of wages that must be made at March 31?
2. What balance sheet and income statement accounts would be incorrectly reported if Demski failed to make this accrual (for each account indicate whether it would be overstated or understated)?

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