The financial statements of Gregg Company reported wages expense of $160,000 during Year 2, wages payable of $16,000 at the beginning of Year 2, and wages payable of $22,000 at the end of Year 2. What amount of cash was paid for wages during Year 2?
A)$176,000
B)$160,000
C)$154,000
D)$144,000

Question

Quizplus · Accepted Answer

To determine the cash paid for wages during Year 2, we need to find the difference between the wages expense reported on the income statement ($160,000) and the change in wages payable from the beginning to the end of the year ($22,000 - $16,000 = $6,000 decrease in payable).

Cash paid for wages = Wages expense - Decrease in wages payable
Cash paid for wages = $160,000 - $6,000
Cash paid for wages = $154,000

Therefore, the correct answer is choice C.

The Financial Statements of Gregg Company Reported Wages Expense of $160,000