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29 September, 23:08

Cook Builders pays its workers every two weeks. As of December 31 of Year 1, workers have earned wages of $9,000 for which they have not yet been paid; they will not be paid these wages until January of next year. The correct adjusting entry was made. On January 5 of Year 2, Cook Builders paid total wages to the employees of $13,000, of which $9,000 related to work performed last year. Which one of the following is included in the journal entry necessary on January 5 of Year 2 to record the payment of $13,000 in cash?

A. debit wage expense $13,000

B. debit wages payable $4,000

C. debit wage expense $9,000

D. credit wages payable $9,000

E. debit wage expense $4,000

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  1. 29 September, 23:16
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    Answer: E Debit wage expense $4,000

    Explanation:Cook Builders has in its books $9,000 wage payable as at 31st Dec year 1. On 5th Jan year 2, it paid the wage payable of $9,000 for year 1 plus $4,000 for the current year.

    This makes the $4,000 a current year expenses on wages.

    the Entries to the above is stated below as:

    Credit Bank with $13,000 as cash is paid from the bank

    Debit wage payable with $9,000 as outstanding wages for year 1

    Debit wage expense with $4,000 as current week wage payment
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