Wages Payable

$60,000$

Then the factory depreciation:

Deprecistion Expense$-$Factory Machinery

$20,000$

Accumulated Depreciation$-$Factory Machinery

$20,000$

Todd's supervisor, Jeff Fastow, walks by and notices the entries. The following corrersation takes place:

Jeff$-$That is a very unusual way to record our factory wages and depreciation for the month.

Todd: What do you mean? This is the way I was taught in school to record wages and depreciation.

You know, debit an expense and credit Cash or payables or$,$ in the case of depreciation, credit Accumulated Depreciation.

Jeff: Well, it is not the credits I am concerned about. It is the debits$-$I do not think you have recorded the debits correctly. I would not mind if rou were reconting the administrative wages or office equipment depreciation this way, but I have got real questions about reconding factory wages and factory machinery depreciation this way.

Todd Now I am really confused. You mean this is correct for administrative costs but not for factory costs? Well, what am I supposed to do$-$and nin?

Play the role of Jeff and answer Todd's question.

Why would Jeff accept the journal entries if they were for administrative costs?