DAC Company pays its employees every Friday. On January 2, 20--, the Company paid $6,000 for the 5 days beginning the previous Monday, December 29. Prepare the adjusting entry on December 31. Omit explanations. If an amount box does not require, leave it blank.

Question

Leonard Newman

Business

30 December, 22:36

DAC Company pays its employees every Friday. On January 2, 20--, the Company paid $6,000 for the 5 days beginning the previous Monday, December 29. Prepare the adjusting entry on December 31. Omit explanations. If an amount box does not require, leave it blank.

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Rubi Oconnell · Answer 1

December 31 Salaries & wages expense 3600 Dr

Salaries & wages Payable 3600 Cr

Explanation:

The pay week is of 5 days starting from Monday to Friday. The wage per day is,

wage per day = 6000 / 5 = $1200 per day

The adjusting entry is made based on the accrual or matching principle which follows that the expenses and revenue relating to a particular period should be matched and recorded in their respective periods.

Thus, the wage expense for 3 days ending 31 December will be recorded as wages expense on 31 december for 1200 * 3 = $3600

The credit against this entry will be wages payable as the wage will be paid on January 2.