Question

A company pays its employees at the end of the day each Friday for work done during the five-day work week from Monday through Friday. Wages are consistently $2,500 for each week. In the current year, December 31 fell on a Thursday. What adjusting entry is necessary on December 31?

Answer 1

Step-by-step explanation:

The adjusting entry would be

Wages expense A/c Dr $2,000

To Wages payable A/c $2,000

(Being the wages are adjusted)

Since the total wages per week is $2,500 and December 31 fell on a Thursday. So the wages which are paid from Monday to Thursday would be

= Wages per week × number of days ÷ total number of days in a week

= $2,500 × 4 days ÷ 5 days

= $2,000