Employees have worked for the full year and have received total wages of $306,000 in cash.However,they must wait until the next payday to be paid for the last three days of the year they have worked.The amount owing is $5,500.Wages expense in the statement of financial performance and accrued wages in the statement of financial position are respectively:
A) $311,500 and $5,500.
B) $306,000 and $5,500.
C) $306,000 and $0.
D) $311,500 and $0.

Question

Quizplus · Accepted Answer

The total wages paid in cash is $306,000 and the amount owing for the last three days of the year is $5,500. This means the total wages expense for the year will be $306,000 + $5,500 = $311,500.

Accrued wages, which are wages owed but not yet paid, will appear in the statement of financial position. Since the employees are owed $5,500 for the last three days of the year, the accrued wages will be $5,500.

Therefore, the correct answer is A.

Employees Have Worked for the Full Year and Have Received