Question

In: Accounting

Denton Corporation employs 70 workers in its plant. Each employee is paid $10 per hour and...

Denton Corporation employs 70 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, September 19.

Required:

1. Compute the dollar amount of the weekly payroll.
2. Prepare the journal entry on Friday, September 26, for the payment of the weekly payroll.
3. Denton prepares monthly financial statements. Prepare the adjusting journal entry on Tuesday, September 30, the last day of the month.
4. Prepare the journal entry on Friday, October 3, for the payment of the weekly payroll.
5. Will net income for the month of September be understated or overstated if Denton doesn’t bother with an adjusting entry on September 30?

Solutions

Expert Solution

Requirement 1

Answer -- Dollar amount of the weekly payroll= $24,500

Working

A

Number of Workers

70

B

Number of Working hours in a day

7

C

Number of days in a week

5

D=CxB

Number of hours in a week

35

E

Payment per hour

$          10.00

F=E x D

Payment to one worker

$        350.00

G= F x 70

Payment to 70 Workers in a week

$ 24,500.00

Requirement 2

Date

General Journal

Debit

Credit

29-Sep

Wages expense

$ 24,500.00

           Cash

$ 24,500.00

(Wages paid for the week)

Requirement 3

Date

General Journal

Debit

Credit

30-Sep

Wages expense

$    9,800.00

          Wages payable

$    9,800.00

(Wages payable for two days)

Wages for 5 days= $24,500

Wages for 1 day=$24,500/5= $4,900

Wages for 2 days = 4900 x 2 =$9,800

Requirement 4

Date

General Jopurnal

Debit

Credit

3-Oct

Wages expense

$ 14,700.00

Wages payable

$    9,800.00

              Cash

$ 24,500.00

(Wages paid for the week)

2 days expense has already been recorded on sep 30 so only 3 days expense will be recognized on 3rd October.

Requirement 5

If Adjustment entry is not passed the income would be overstated. Income would be overstated because of Understatement of Expense for 2 days of wages.

ekkarill92 answered 8 months ago
Next > < Previous

Related Solutions

Suppose General Electric paid its line workers $10 per hour in 2015 when the Consumer Price...
Suppose General Electric paid its line workers $10 per hour in 2015 when the Consumer Price Index was 100. Suppose that deflation occurred and the aggregate price level fell to 88 in 2016. Instructions: Round your answers to two decimal places.     a. GE needed to pay its workers $ in 2016 in order to keep the real wage fixed at $10.     b. GE needed to pay its workers $ in 2016 if it wanted to increase the real wage by...
Factory workers at a company are paid a wage of $15 per hour. In addition, the...
Factory workers at a company are paid a wage of $15 per hour. In addition, the company pays benefits (vacation leave, sick leave, health insurance, etc.) equal to 75% of a worker’s base wage for a 40-hour week. Workers are paid 1.5 times the hourly rate for any overtime hours worked in excess of 40 hours during a week, but no additional benefits are paid for overtime work. a) How much wages will a worker receive for working 40, 42,...
Factory workers at a company are paid a wage of $15 per hour. In addition, the...
Factory workers at a company are paid a wage of $15 per hour. In addition, the company pays benefits (vacation leave, sick leave, health insurance, etc.) equal to 75% of a worker’s base wage for a 40-hour week. Workers are paid 1.5 times the hourly rate for any overtime hours worked in excess of 40 hours during a week, but no additional benefits are paid for overtime work. a) How much wages will a worker receive for working 40, 42,...
Factory workers at a company are paid a wage of $15 per hour. In addition, the...
Factory workers at a company are paid a wage of $15 per hour. In addition, the company pays benefits (vacation leave, sick leave, health insurance, etc.) equal to 75% of a worker’s base wage for a 40-hour week. Workers are paid 1.5 times the hourly rate for any overtime hours worked in excess of 40 hours during a week, but no additional benefits are paid for overtime work. a) How much wages will a worker receive for working 40, 42,...
Brighton Services repairs locomotive engines. It employs 100 full-time workers at $17 per hour. Despite operating...
Brighton Services repairs locomotive engines. It employs 100 full-time workers at $17 per hour. Despite operating at capacity, last year's performance was a great disappointment to the managers. In total, 10 jobs were accepted and completed, incurring the following total costs: Direct Materials: $1,054,400 Direct Labor: $4,760,000 Manufacturing Overhead: $1,120,000 Of the $1,120,000 manufacturing overhead, 35 percent was variable overhead and 65 percent was fixed. This year, Brighton Services expects to operate at the same activity level as last year,...
Brighton Services repairs locomotive engines. It employs 100 full-time workers at $21 per hour. Despite operating...
Brighton Services repairs locomotive engines. It employs 100 full-time workers at $21 per hour. Despite operating at capacity, last year's performance was a great disappointment to the managers. In total, 10 jobs were accepted and completed, incurring the following total costs. Direct materials $ 1,046,400 Direct labor 4,200,000 Manufacturing overhead 1,000,000 Of the $1,000,000 manufacturing overhead, 30 percent was variable overhead and 70 percent was fixed. This year, Brighton Services expects to operate at the same activity level as last...
Brighton Services repairs locomotive engines. It employs 100 full-time workers at $22 per hour. Despite operating...
Brighton Services repairs locomotive engines. It employs 100 full-time workers at $22 per hour. Despite operating at capacity, last year's performance was a great disappointment to the managers. In total, 10 jobs were accepted and completed, incurring the following total costs. Direct materials $ 1,050,400 Direct labor 5,280,000 Manufacturing overhead 1,020,000 Of the $1,020,000 manufacturing overhead, 40 percent was variable overhead and 60 percent was fixed. This year, Brighton Services expects to operate at the same activity level as last...
A manufacturing company currently employs 50 workers. It takes a worker an hour to make a...
A manufacturing company currently employs 50 workers. It takes a worker an hour to make a unit and workers are paid $20/hour. The material cost is $5/unit. Each worker works 160 hours/week to meet the current monthly demand of 8,000 units. Due to the change of economy, the manufacturing company predicted that the demand has 60% chance of increasing 50% from the previous month and 40% chance of remaining the same for the next three months. The company is considering...
When Brenda’s Pastry employs three workers, total output is 6 dozen pastries per hour.  After Brenda hires...
When Brenda’s Pastry employs three workers, total output is 6 dozen pastries per hour.  After Brenda hires a fourth worker, the number of pastries produced increases to 7 dozen per hour.  Which of the following is true about the marginal product (MP) and average product (AP) of labor for Brenda’s Pastry? a.Because the MP of the fourth worker is greater than the AP of three workers, AP must fall when the fourth worker is hired b.Because the MP of the fourth worker...
A firm can hire 20 workers for $10 per hour, but finds it must raise the...
A firm can hire 20 workers for $10 per hour, but finds it must raise the wage to $12 to attract another worker. If it must pay all its workers the same wage, the marginal wage cost of the 21st worker is _. A.$10. B. $11. C. $21. D. $31.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT