Question

Accrued Expense A company pays its employees every other Friday, with daily wages of $340, including weekends. The previous payday occurred on Friday, June 24. If the company's year ended June 30, what amount should the wages payable account on the balance sheet show?

Answer 1

The amount that should be shown on the wages payable account on the balance sheet is $1,360.

Step-by-step explanation:

To calculate the amount that should be shown on the wages payable account on the balance sheet, we need to determine the number of days of accrued wages between the previous payday on June 24 and the year-end of June 30. Since employees are paid every other Friday and receive daily wages of $340, we can calculate the number of days by analyzing the number of Fridays between June 24 and June 30.

From June 24 to June 30, there are 6 days. However, since Saturdays and Sundays are also included in the daily wages, we need to subtract 2 days (Saturday and Sunday) from the total.

Therefore, the number of accrued days is 6 - 2 = 4 days. Multiply this by the daily wage of $340 to get the accrued wage amount of $1,360. This is the amount that should be shown on the wages payable account on the balance sheet.