**Year-End Adjusting Entry for Weekly Wages****Scenario:**Websawvy operates on a 5-day work week and pays weekly wages totaling $1,750. Given that December 31 falls on a Tuesday, the aim is to determine the appropriate adjusting entry to record the accrual of wages at year-end.**Question:**If December 31 falls on a Tuesday, what should be the adjusting entry to record the accrual of wages at year-end?**Options:****A.** Debit to Wages Expense, $350; credit to Wages Payable, $350 **(Correct Calculation: 1 day's wages = $1,750/5 = $350)****B.** Debit to Wages Payable, $350; credit to Wages Expense, $350 **C.** Debit to Wages Expense, $700; credit to Wages Payable, $700 **(Calculation Error: This assumes 2 days' wages, though only 1 day is required)****D.** No entry required *Explanation:*Since December 31 is a Tuesday, the company will need to accrue wages for the 1 day (Monday) that employees have worked but have not yet been paid for by year-end. The correct accounting treatment is to debit the Wages Expense and credit Wages Payable to reflect this accrued liability.*Note: It’s important for students to understand how to break down the given amount into daily wages and how to calculate the necessary adjusting entry based on the number of workdays that overlap with the end of the fiscal period.*

Web-savvy has the 5 working days of the week and it pays weekly $ 1750 and the current accounting…

Websavvy has a 5-day work week and pays weekly wages in the amount of $1,750. If December 31 falls on a Tuesday, what would be the adjusting entry to record the accrual of wages at year-end? debit to Wages Expense, $350; credit to Wages Payable, $350 B debit to Wages Payable, $350%; credit to Wages Expense, $350 debit to Wages Expense, $700; credit to Wages Payable, $700 no entry required

Websavvy has a 5-day work week and pays weekly wages in the amount of $1,750. If December 31 falls on a Tuesday, what would be the adjusting entry to record the accrual of wages at year-end? debit to Wages Expense, $350; credit to Wages Payable, $350 B debit to Wages Payable, $350%; credit to Wages Expense, $350 debit to Wages Expense, $700; credit to Wages Payable, $700 no entry required

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 46BE

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Concept explainers

Payroll Entries

Payroll is a comprehensive record of employees that are paid by the company. Payroll classifies employees into various categories according to their function and pays scale (basic wage, allowance, income tax, other taxes, employee loans, etc.). Payroll processes form the bedrock of every organization as it contains sensitive information on the ‘wage and paycheck’ portion of the company’s strength—its employees. The organization needs to keep a track of the employees currently on the payroll, the net payout for the company, the record of transactions related to the employees including deductions and payroll taxes to identify the liability and its effect on the balance sheet (and other financial statements). Payroll records also include qualitative factors such as the conduct of the employee.

Question

**Year-End Adjusting Entry for Weekly Wages**

**Scenario:**
Websawvy operates on a 5-day work week and pays weekly wages totaling $1,750. Given that December 31 falls on a Tuesday, the aim is to determine the appropriate adjusting entry to record the accrual of wages at year-end.

**Question:**
If December 31 falls on a Tuesday, what should be the adjusting entry to record the accrual of wages at year-end?

**Options:**

**A.** Debit to Wages Expense, $350; credit to Wages Payable, $350
**(Correct Calculation: 1 day's wages = $1,750/5 = $350)**

**B.** Debit to Wages Payable, $350; credit to Wages Expense, $350

**C.** Debit to Wages Expense, $700; credit to Wages Payable, $700
**(Calculation Error: This assumes 2 days' wages, though only 1 day is required)**

**D.** No entry required

*Explanation:*
Since December 31 is a Tuesday, the company will need to accrue wages for the 1 day (Monday) that employees have worked but have not yet been paid for by year-end. The correct accounting treatment is to debit the Wages Expense and credit Wages Payable to reflect this accrued liability.

*Note: It’s important for students to understand how to break down the given amount into daily wages and how to calculate the necessary adjusting entry based on the number of workdays that overlap with the end of the fiscal period.*

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