Question

Pablo Management has seven part-time employees, each of whom earns $125 per day. They are paid on Fridays for work completed Monday through Friday of the same week. Near year-end, the seven employees worked Monday, December 31, and Wednesday through Friday, January 2, 3, and 4. New Year's Day. (January 1) was an unpaid holiday.

1. Prepare the year-end adjusting entry for wages expenses.

2. Prepare the journal entry to record payment of the employees' wages on Friday, January 4th.

Answer 1

Salary per employee	$125.00
No. of employees	7
Total Salary per day	$875.00	(125 * 7)
Date	Day	Amount due	Cumulative Due	Amount Paid
31-Dec	Monday	$875.00	$875.00	$0.00
1-Jan	Tuesday	Holiday & Unpaid	$875.00	$0.00
2-Jan	Wednesday	$875.00	$1,750.00	$0.00
3-Jan	Thursday	$875.00	$2,625.00	$0.00
4-Jan	Friday	$875.00	$3,500.00	$3,500.00
1.)
Date	Particulars		Amount (Dr.)	Amount (Cr.)
31-Dec	Wage Expenses             (Dr.)		$875.00
Monday	Wages Payable			$875.00
	(Wages to be paid for the year end
	for 1 day)
2.)
Date	Particulars		Amount (Dr.)	Amount (Cr.)
4-Jan	Wage Expenses             (Dr.)		$2,625.00
Friday	Wages Payable              (Dr.)		$875.00
	Cash/Bank			$3,500.00
	(Wages for Current week, Comprising
	Last and Current Year Paid)
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