Danish Ltd has an average weekly payroll of $200,000.The employees are entitled to 2 weeks',non-vesting sick leave per annum.Past experience suggests that 56 per cent of employees will take the full 2 weeks' sick leave and 22 per cent will take 1 week's leave each year.The rest of the employees take no sick leave.In the current week an employee with a weekly salary of $600 has been off sick for the first time this year.The employee took 2 days off out of her normal 5-day working week.Assuming that a weekly entry has been made to record the accumulated liability for sick leave and that PAYG tax is deducted at 30 per cent,what would the entry be to record the employee's weekly salary (round amounts to the nearest dollar)?
E) None of the given answers.

Question

Quizplus · Accepted Answer

The entry to record the employee's weekly salary would be:

Debit: Wages Expense - $600
Credit: PAYG Tax Payable - $180
Credit: Wages Payable - $420

The sick leave liability is not relevant to this entry as the employee has only taken 2 days off and this is less than a week's sick leave. None of the other answer choices reflect this fact.

Danish Ltd Has an Average Weekly Payroll of $200,000