Question

Pablo Management has five employees, each of whom earns $250 per day. They are paid on Fridays for work completed Monday through Friday of the same week. Near year-end, the five employees worked Monday, December 31, and Wednesday through Friday. January 2,3, and 4. New Year's Day (January 1) was an unpaid holiday. Prepare the year-end adjusting entry for wages expense and record payment of the employees' wages on Friday, January 4. Answer is complete but not entirely correct. No General Journal Debit Credit 1 December 31 1.250 Wages expense Wages payable Accounts payable OO 1.250 2 January 04 Wages expense Wages payable Cash OOO 3,750 1.250 5.000

Answer 1

1. The correct journal entry would be: A B 1 Date Account Title & Exaplanation 2 Dec-31 Wages Expense 3 Wages Payable с Debit $1250 D Credit $1250 Wages payable means that the liability has already been recognized so there is no requirement to create an accounts payable liability again. The second journal entry is correct. 2. с $ 1,30,000 A B 1 WT Company 2 Income Statement 3 For year ended Dec 31 4 Revenues 5 Trucking fees earned 6 7 Expenses: 8 Depreciation expense - Trucks $ 23,500 9 Salaries expense $ 61,000 10 Office supplies expense $ 8,000 11 Repairs expense - Truck $ 12.000 12 13 Total expenses 14 Net Income ll $ $ 1,04,500 25,500 Net Income = $130.000 - $104,500 = $25,500