Question

Proctor Inc. has a weekly payroll of $8,000 for a 5-day workweek, Monday through Friday. If December 31, the last day of the accounting year, falls on Wednesday, Proctor would make an adjusting entry that would

a. increase wages expense $4,800.
b. decrease wages payable $4,800.
c. decrease cash $4,800.
d. increase wages payable $8,000.

Answer 1

The correct option is A

Step-by-step explanation:

The weekly payroll amount to $8,000, which starts from Monday to Friday.

So, per day payroll would be:

Per day payroll = Weekly payroll ÷ Number of Days

= $8,000 ÷ 5

= $1,600

And the December 31, is Wednesday. So, the wages expense will increase for 3 days (that is Monday, Tuesday and Wednesday).

It would amounts to:

= Per day payroll × Number of days

= $1,600 × 3

= $4,800