Wage Expense and Wages Payable

Accounting
Tutor: None Selected Time limit: 1 Day

Green corp has 3 employees.  Each earns $600 per week for a 5 day work week ending on friday.  this month the last day of the month falls on wednesday.  the company should make which of the following adjusting entries.

1. credt wage expense $360 - debit wage payable 360

2 dbt wage expense 1080 - credit wage payable 1080

3 crdt wage expense 1080 - debit wage payable 1080

4 debit wage exp 360 - credit wage payable 360

Sep 10th, 2015

Thank you for the opportunity to help you with your question!

Determine what they earn in a day

=600/5

$120

For three days  they would have earned 120 * 3 which is $360

Wages Expense is an income statement account. Wages Payable is a current liability account that is reported on the balance sheet.

4 debit wage exp 360 - credit wage payable 360

Liabilities are credited while assets are debited

Please let me know if you need any clarification. I'm always happy to answer your questions.
Sep 10th, 2015

okay, this makes more sense reading it several times now - but last question, since there are 3 employees would you take your answer and x by 3 for 1080? 

Sep 10th, 2015

Yes you have to do that, $360 is just for one employee

Sep 10th, 2015

Did you know? You can earn $20 for every friend you invite to Studypool!
Click here to
Refer a Friend
...
Sep 10th, 2015
...
Sep 10th, 2015
May 27th, 2017
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer