What is adjusting entry?

Accounting question, adjusting entry dealing with Wages payable?

• Denton Corporation employs 50 workers in its plant. Each employee is paid $10 per hour and works seven hours per day, Monday through Friday. Employees are paid every Friday. The last payday was Friday, October 20. Required 1. Compute the dollar amount of the weekly payroll. 2. Prepare the journal entry on Friday, October 27, for the payment of the weekly payroll. 3. Denton prepares monthly financial statements. Prepare the adjusting journal entry on Tuesday, October 31, the last day of the month. 4. Prepare the journal entry on Friday, November 3, for the payment of the weekly payroll.

• Answer:

  1. Compute the dollar amount of the weekly payroll. 50 x 7 x 5 x 10 = 17,500 per week 2. Prepare the journal entry on Friday, October 27, for the payment of the weekly payroll. Dr Wages Expense 17,500 Cr Cash 3. Denton prepares monthly financial statements. Prepare the adjusting journal entry on Tuesday, October 31, the last day of the month. 17,500 x 2/5 = 7,000 Dr Wages Expense 7,000 Cr Wages Payable 7,000 4. Prepare the journal entry on Friday, November 3, for the payment of the weekly payroll. 17,500 x 3/5 = 10,500 Dr Wages Payable 7,000 Dr Wages Expense 10,500 Cr Cash 17,500