Assume December 31 is a Wednesday. Wages are paid every Friday, and the weekly payroll (for five days) amounts to $3,000.
To record the correct amount of expense for December, the firm makes the following entry on December 31:
A) Wages Payable 3,000
Wages Expense 3,000
B) Wages Payable 1,800
Wages Expense 1,800
C) Wages Expense 1,680
Wages Payable 1,680
D) Wages Expense 1,800
Wages Payable 1,800
E) None of the above

Question

Quizplus · Accepted Answer

Since December 31 is a Wednesday, there are three workdays in that week (Monday, Tuesday, and Wednesday) that fall in December. The weekly payroll is $3,000 for five days, so each day's payroll is $600 ($3,000/5). For three days, the payroll expense is $1,800 ($600 x 3). Therefore, the correct entry to record the expense for December is to debit Wages Expense and credit Wages Payable for $1,800.

Assume December 31 Is a Wednesday