Question

Pablo Management has ten employees, each of whom earns $100 per day. They are normally paid on Fridays for work completed Monday through Friday of the same week. Near year-end, the ten employees worked Monday December 31 and Wednesday through Friday, January 2, 3, and 4. New Year’s Day (January 1) was an unpaid holiday. Prepare the year-end adjusting entry for wages expense and record payment of the employees’ wages on Friday January 4.

Answer 1

Year end adjusting entry:

Debit Credit

Salaries expense $1,000

(10*100)

Salaries payable $1,000

January 4, journal entry:

Debit Credit

Salaries expense $3,000

(10*100*3)

Salaries payable $1,000

Cash $4,000

(10*100*4)

Step-by-step explanation:

The year end adjusting entry that shall be recorded by the Pablo management in its accounts on December 31 in respect of salaries expenses is given as follows:

Debit Credit

Salaries expense $1,000

(10*100)

Salaries payable $1,000

The journal entry that shall be recorded by the Pablo management in its accounts on January 4 in respect of salaries paid to employees is given as follows:

Debit Credit

Salaries expense $3,000

(10*100*3)

Salaries payable $1,000

Cash $4,000

(10*100*4)