Question

Brunswick Corporation has a calendar year-end. Brunswick pays its workforce on Fridays for a five-day workweek ending on that day. The payroll for a week is $150,000. If December 31 falls on a Thursday, the adjusting journal entry the company needs to record will include a:

Group of answer choices

credit to Salaries and Wages Payable $60,000.

credit to Salaries and Wages Payable $120,000.

debit to Salaries and Wages Expense $30,000.

credit to Salaries and Wages Payable $75,000

debit to Salaries and Wages Expense $150,000.

Answer 1

The adjusting journal entry will include a:

Credit to Salaries and Wages Payable $120,000

The salaries for the four days of the week will not be paid on 31st December as it is Thurday and the wages are paid on Friday of every week.

As the first four days falls under different accounting period, the accrued expenses are recorded as shown above.

Four day wages = (Total Weekly Wages / Number of Days) x 4

                          = ($150,000 / 5) x 4

                          = $120,000