Question

Fletcher Company pays its employees their wages each Friday. The most recent payment occurred on Friday, December 26. The next payroll will be paid on January 2. There are three more work days in December after December 26th. Employees work 5 days a week and the company pays $30,000 per week in wages. What will be the adjusting entry to accrue wages expense at the end of December?

Answer 1

wages expense 18,000 debit

wages payable 18,000 credit

--adjusting entry for wages accrued of the period--

Step-by-step explanation:

The adjusting entry will recognize the wages of these three days in order to match the expenses with the period on they are generated.

$ 30,000 on wages per week of 5 days so:

30,000 / 5 = 6,000 dollars of wages per day

For three days we need to recognize $6,000 per day x 3 days = $ 18,000

We recognize the wages payable and expense for this amount.