Employees at Mango Corporation are paid $18,000 cash every Friday for working Monday through Friday. The calendar year accounting period ends on Tuesday, December 31. How much salaries and wages expense should be recorded three days later on January 2?

Question

Quizplus · Accepted Answer

The amount of salaries and wages expense that should be recorded on December 31 is $360,000 ($18,000 per week x 20 weeks). Since the payment for the last week of the year will be paid on January 3 (the first Friday after December 31), no wage expense will occur on December 31. Therefore, the accrued salary expense for three days that have passed since December 31 is $10,800 ($18,000 x 3/5).

Employees at Mango Corporation Are Paid $18,000 Cash Every Friday