Truffle Candies paid employee wages on and through Friday, January 26, and the next payroll will be paid in February. There are three more working days in January (29-31). Employees work 5 days a week and the company pays $1,800 a day in wages. What will be the adjusting entry to accrue wages expense at the end of January?
D) No adjusting entry is required

Question

Truffle Candies paid employee wages on and through Friday, January 26, and the next payroll will be paid in February. There are three more working days in January (29-31). Employees work 5 days a week and the company pays $1,800 a day in wages. What will be the adjusting entry to accrue wages expense at the end of January? 
D) No adjusting entry is required

Quizplus · Accepted Answer

The adjusting entry to accrue wages expense at the end of January will be:

Wages expense (accrued)                    $9,000
Wages payable                                         $9,000

The calculation is:
Number of working days in January (excluding paid days) = 3
Number of working days in a week = 5
Total number of working days in January = 23 (including paid days)
Total wages for January = 23 x 5 x $1,800 = $207,000
Wages paid in January = 26 x 1 x $1,800 = $46,800
Wages accrued at the end of January = $207,000 - $46,800 = $160,200

Therefore, the adjusting entry is necessary to record the accrued wages expense of $9,000 ($160,200 / 18 working days = $9,000 per day). The correct option is C.

Truffle Candies Paid Employee Wages on and Through Friday, January