Question

Windy Harbor Boat Company pays its employees on a weekly basis each Friday. During the week ended​ Friday, January​ 3, Year​ 2, the company had a weekly payroll of​ $125,750. Assuming that the company is on a calendar​ basis, has a​ five-day workweek, and that daily wages are always the​ same, what adjusting journal entry​ (if any) would be made on December​ 31, Year​ 1?

Answer 1

Answer:

Following adjusting journal entry​ is made on December​ 31, Year​ 1.

                                                                    Dr.           Cr.

Salaries and Wages Expense               $50,300

Salaries and Wages accrued Payable                 $50,300

Explanation:

Assuming there is 5 working days in the week and company pay for these only.

Per week Payment = $125,750

per day payment = 125750 / 5 = $25,150

Days Lies in Year 2 = January​ 3, Year​ 2 - December​ 31, Year​ 1 = 3 days

Days Lies in Year 1 = 5 - 3 = 2 days

Salaries and Wages accrued on December​ 31, Year​ 1 = $25,150 x 2

Salaries and Wages accrued on December​ 31, Year​ 1 = $50,300