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lorasvet [3.4K]
3 years ago
7

Merando Industries employs a 5-day workweek and a September 30 year-end. Normal weekly wages amount to $41760. If September 30 e

nds on a Wednesday, what is the appropriate journal entry at fiscal year-end
Business
1 answer:
kati45 [8]3 years ago
4 0

Answer:

Debit: Salaries and wages expense $25,056

Credit: Salaries and wages payable $25,056

<em>(To recognize the salaries and wages payable at year-end)</em>

Explanation:

Merando Industries employs a 5-day workweek - this means $41,760 normal weekly wages can be divided by 5 to arrive at the daily workweek wages, which is $41,760 / 5 = $8,352.

If the fiscal year-end is a Wednesday, the company has to recognize a salaries and wages payable of $25,056 due to the following:

  • the workweek remains 2 weekdays to complete
  • the company pays at the completion of the 5-day workweek
  • there is no need to recognize the remaining 2 days next year as salaries and wages payable since the employer may not have control over the employees - they may decide the exit the company

So, the amount to be recognized will be $8,352 x 3 = $25,056.

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In the given case, the company have acquired a lot of assets over the years, that means the company do not lack in technology and physical resources like machinery etc.

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