Answered

On December 31, 20--, Karmansky Company needed to record its accrued wages for year-end. If December 31 is a Tuesday, then Karmansky Company must account for two days of wages. The company operates on a five-day workweek, the prior week’s gross pay (December 26 payday) was $32,650, and the net pay was $21,330. Journalize the adjusting entry to be made on December 31 for the accrued wages.

Answer :

Answer:

Debit Wages account (p/l)  $13,060

Credit Accrued wages account  $13,060

Further,

Debit Wages account (p/l)    $ 13,060

Credit Accrued wages  $ 8,532

Credit Accrued deduction  $ 4,528

Being entries to recognized accrued wages and deductions as at 31 December.

Explanation:

Given that weekly gross pay

= $32,650

2 days pay = (2/5) × $32,650

                  = $13,060

To accrue for the two day's wage

Debit Wages account (p/l)  $13,060

Credit Accrued wages account  $13,060

Being entries to recognize accrued wages as at December 31.

To break it further, the deductions (such as taxes) from this gross amount

= ((32650 - 21330)/32650) × 13060

= $4,528

Net income = $ 13,060 - $ 4,528

                   = $8,532

To account for this as well, the entries would be

Debit Wages account (p/l)    $ 13,060

Credit Accrued wages  $ 8,532

Credit Accrued deduction  $ 4,528

Being entries to recognized accrued wages and deductions as at 31 December.

Other Questions