The Snow Drift ski resort pays its salaried staff $40,000 for 10 days work (Monday - Friday) every two weeks. The resort's financial year end falls 4 working days into its fortnightly salary payment cycle. The adjusting entry that it needs to make in connection with wages is:

Question

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The adjusting entry required in connection with wages is to recognize the wages earned by the employees for the four days that fall outside the financial year end. This adjustment is necessary because at the end of the financial year, the employees have worked but have not yet been paid, so their wages must be accrued.

The entry required to record this adjustment should involve the Wage Expense and Wages Accrued accounts. Option C is the correct answer as it debits Wage Expense for $16,000 and credits Wages Accrued for $16,000. This adjustment recognizes the expense and liability for the four unpaid working days at year-end.

Option A is incorrect because it debits Wages Pending, which is not an account typically used in connection with wage accruals. Option B is incorrect because it credits Wage Expense, which would reduce the expense rather than recognizing the additional expense for the four unpaid days. Option D is incorrect because it debits Wages Pending, which again is not a typical account used in connection with accruals, and also because it incorrectly credits Wages Accrued.

The Snow Drift Ski Resort Pays Its Salaried Staff $40,000