Question

Hahn Corp. has three employees. Each earns $600 per week for a five-day workweek ending on Friday. This month the last day of the month falls on a Wednesday. The company should make an adjusting entry: (Multiple Choice)
A. Crediting Wage Expense for $360 and debiting Wages Payable for $360.
B. Debiting Wage Expense for $360 and crediting Wages Payable for $360.
C. Crediting Wage Expense for $1,080 and debiting Wages Payable for $1,080.
D. Debiting Wage Expense for $1,080 and crediting Wages Payable for $1,080.

Answer 1

Answer:

D. Debiting Wage Expense for $1,080 and crediting Wages Payable for $1,080.

Explanation:

Salary Calculation for three employees for one day = $ 600 + $ 600 + $ 600/5= 1800/5= $ 360

Salary for 3 days for 3 workers= $ 360 * 3= $ 1080

Adjusting Entry would be recognizing the expense and liability for the payment of wages.

So

Wages expense will be debited  with $ 1080

And wages payable would be credited with $ 1080