Exercise 8-40 Accrued Wages and Payment of Payroll GCD Advisors offices are open
ID: 2397324 • Letter: E
Question
Exercise 8-40
Accrued Wages and Payment of Payroll
GCD Advisors offices are open Monday through Friday and GCD pays employees salaries of $50,000 every other Friday. During the current year December 31 falls on a Thursday and the next payday is January 8.
Given this information, determine the adjusting journal entry that GCD must make on December 31 as well as the journal entry to record the payment of the payroll on January 8. If an amount box does not require an entry, leave it either blank or enter "0".
Dec. 31
Jan. 8
(Record payment of wages)
Dec. 31
Explanation / Answer
Answers
Date
Day
Per Day Salary
Salary Wages Expenses
28-Dec
Monday
$ 10,000.00
29-Dec
Tuesday
$ 10,000.00
30-Dec
Wednesday
$ 10,000.00
31-Dec
Thursday
$ 10,000.00
$ 40,000.00 [Accrued on 31 Dec]
01-Jan
Friday
$ 10,000.00
02-Jan
Saturday
$ -
03-Jan
Sunday
$ -
04-Jan
Monday
$ 10,000.00
05-Jan
Tuesday
$ 10,000.00
06-Jan
Wednesday
$ 10,000.00
07-Jan
Thursday
$ 10,000.00
08-Jan
Friday
$ 10,000.00
$ 50,000.00 [5 days salaries for Jan 1st week]
Total paid in cash
$ 90,000.00
Date
Accounts title
Debit
Credit
31-Dec
Salaries (Wages) Expenses
$ 40,000.00
Salaries (and wages) Payable
$ 40,000.00
(accrued wages for last 4 days of year)
08-Jan
Salaries (Wages) Expenses
$ 50,000.00
Salaries (and wages) Payable
$ 40,000.00
Cash
$ 90,000.00
(accrued wages paid including payment for 1st week of Jan)
Date
Day
Per Day Salary
Salary Wages Expenses
28-Dec
Monday
$ 10,000.00
29-Dec
Tuesday
$ 10,000.00
30-Dec
Wednesday
$ 10,000.00
31-Dec
Thursday
$ 10,000.00
$ 40,000.00 [Accrued on 31 Dec]
01-Jan
Friday
$ 10,000.00
02-Jan
Saturday
$ -
03-Jan
Sunday
$ -
04-Jan
Monday
$ 10,000.00
05-Jan
Tuesday
$ 10,000.00
06-Jan
Wednesday
$ 10,000.00
07-Jan
Thursday
$ 10,000.00
08-Jan
Friday
$ 10,000.00
$ 50,000.00 [5 days salaries for Jan 1st week]
Total paid in cash
$ 90,000.00
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