Question

Nash's Trading Post, LLC employs a 5-day workweek and a September 30 year-end. Normal weekly wages amount to $26640. If September 30 ends on a Wednesday, what is the appropriate journal entry at fiscal year-end?

Answer 1

Debit Wages expense $15,984

Credit Accrued wages $15,984

Step-by-step explanation:

Given that the week ends on Friday, however the fiscal year end is September 30 which is a Wednesday. It means that the weekly wage of 3 days would be accrued.

If the weekly (5-day) wage is $26640

Then wage for 3 days

= 3/5 × $26640

= $15,984

Therefore, the entries required

Debit Wages expense $15,984

Credit Accrued wages $15,984

Being entries to accrue for wages incurred as at end of the fiscal year.