Question

Question: Pablo Management has five part-time employees, each of whom earns $250 per day. They are normally

paid on Fridays for work completed Monday through Friday of the same week. Assume that December 28,

2017, was a Friday, and that they were paid in full on that day. The next week, the five employees worked

only four days because New Year’s Day was an unpaid holiday.

a. Assuming that December 31, 2017, was a Monday, prepare the adjusting entry for wages expense that

would be recorded at the close of that day.

b. Assuming that January 4, 2018, was a Friday, prepare the journal entry that would be made to record

payment of the employees’ wages for that week.

Short answer

The wages expense account is debited and wages payable is credited with $1,250.

Step-by-step solution

Step-by-Step SolutionStep 1: Definition of wages payable

Wages payable are those wages that are due but payment not made.

Adjusting entry for wages

	Journal entry
Date	Particulars	Debit	Credit
December 31, 2017	Wages Expense	$1,250
	Wages Payable		$1,2550
	(Adjusting entry for wage payable)

$$\begin{gathered} \mathbf{WagesExpenses}\mathbf{=}\mathbf{NumberofEmployees}\mathbf{\times }\mathbf{WagesPerDay} \\ \mathbf{=}\mathbf{\$}\mathbf{250}\mathbf{\times }\mathbf{5} \\ \mathbf{=}\mathbf{\$}\mathbf{1}\mathbf{,}\mathbf{250} \end{gathered}$$