Ask Question
18 March, 14:09

The employees of Lucid Laboratories are paid every two weeks on Friday for a Monday though Friday work week. Total payroll is $ 25 comma 000 and covers 10 workdays. The end of the current month falls on the second Tuesday of the pay period. What is the adjusting journal entry to accrue payroll at the end of the month?

+1
Answers (1)
  1. 18 March, 14:21
    0
    Debit Credit

    Wages expenses $17,500

    Wages receivable $7,500

    Wages payable $25,000

    Explanation: The end of the current month falls on the second Tuesday of the pay period means, on the 7th day, the end of the month was Tuesday instead of the expected 10th workday and a Friday. In this instance, it means the employees of Lucid Laboratories had only worked for 7 days, then a wages expense of 7/10 days x $25,000 ($17,500) would be recorded with the balance being a wage receivable (since the employees are expected to work for the remaining work days in the next month). The total amount would then be recorded as a payable.

    Next month, when it is a first Friday and is time to make payment, the company will record the following entries:

    Debit Credit

    Wages payable $25,000

    Cash $25,000

    Wages expense $7,500

    Wages receivable $7,500
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “The employees of Lucid Laboratories are paid every two weeks on Friday for a Monday though Friday work week. Total payroll is $ 25 comma ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers