Question

Pablo Management has seven employees, each of whom earns $210 per day. They are paid on Fridays for work completed Monday through Friday of the same week. Near year-end, the seven employees worked Monday, December 31, and Wednesday through Friday, of the same week. The next week, the seven employees worked only four days because New Year's Day was an unpaid Holiday.
Required:
a. Prepare the adjusting entry that would be recorded Monday, December 31, 2013.
b. Prepare the journal entry that would be made to record payment of the employees' wages on Friday, Janyary 4, 2014.

Answer 1

Answer:

a) $1,470 Debit –Wage Expense; $1,470 Credit –Wage Payable.

b) $4,410 Debit –Wage Expense; $1,470 Debit –Wage Payable

Explanation:

Remember, we are told each of the worker earns $210 per day. Therefore

a.To record accrued and current wages.Wages expense = 7 workers × 3 days × $210 = $4,410.

b. To record accrued wages four days Cash = 7 workers × 4 days × $210 = $5,880. For one day (7 workers × $210) = $1,470.