Appendix 2 EX 4-29 Reversing entry

The following adjusting entry for accrued wages was recorded on December 31:


Dec. 31 Wages Expense 5,500
                              Wages Payable 5,500

a. Journalize the reversing entry that would be made on January 1 of the next period.

b. Assume that the first paid period of the following year ends on January 6 and that wages of $61,375 were paid. Journalize the entry to record the payment of the January 6 wages.

c. Journalize the entry to record the payment of the January 6 wages assuming that a reversing entry was not made on January 1.

d. What is wages expense for the period January 1–6?


Answers:

a.  Jan. 1 Wages Payable5,500
Wages Expense5,500
b.  Jan. 6 Wages Expense61,375
Cash61,375
c.  Jan. 6 Wages Expense55,875
Wages Payable5,500
Cash61,375
d. $55,875 ($61,375 – $5,500)