Elwood Paragliders Pty Ltd reports monthly. Wages were paid on the last Friday of each month. On Sunday 30 June 2024, wages incurred (owing) to employees (workers) totalled $2,400. Elwood Paragliders Pty Ltd adopts the accrual method of proft determination.
Required:
The Balance Day adjustment to record this event on 30 June 2024 would be.
O Debit (DR): Wages expense $2,400 and Credit (CR): Wages (Accrued) payable $2,400.
O Debit (DR): Wages expense $2,400 and Credit (CR): Prepaid wages $2,400.
O Debit (DR): Cash $2,400 and Credit (CR): Wages expense $2,400
O Debit (DR): Wages $2,640 and Credit (CR): GST payable $240; Credit (CR): Wages (Accrued) payable $2,400O Debit (DR): Cash $2,640 and Credit (CR): GST payable $240; Credit (CR): Wages (Accrued) payable $2,400.
The Balance Day adjustment to record this event on 30 June 2024, given that Elwood Paragliders Pty Ltd follows the accrual method of profit determination, would be: O Debit (DR): Wages expense $2,400 and Credit (CR): Wages (Accrued) payable $2,400.
This adjustment reflects the wages incurred but not yet paid at the end of the month, properly recognizing the expense in the period it was earned while also acknowledging the liability to be paid in the future.
