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Pay employees from another company payroll account?

 
 
cld
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      03-30-2005, 08:30 PM
How would you set up a procedure that would pay an employee (1099) from ABC
company's depleted payroll checking account with a manual check from XYZ
company payroll account? What journal entries would be generated. The
employee would still get a 1099 from ABC company at year end.


 
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Paul A Thomas
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      03-30-2005, 10:09 PM

"cld" <(E-Mail Removed)> wrote
> How would you set up a procedure that would pay an employee (1099) from
> ABC company's depleted payroll checking account with a manual check from
> XYZ company payroll account? What journal entries would be generated.
> The employee would still get a 1099 from ABC company at year end.



As long as both companies agree...............


"XYZ" would record a loan receivable from "ABC" in the amount of the check.

"ABC" would record a loan payable in the amount of the payment, and debit an
expense (you use "employee" and "(1099)" like they are interchangeable).

I see nothing but problems down the road if these types of transactions
continue.


--
Paul A. Thomas, CPA
Athens, Georgia
taxman at negia.net


 
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Bluepen
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      04-02-2005, 06:48 AM

1099 and employee to not compute. I see this was not posted on April
1, so it is not an April fools joke.

Company A could help Company B out, but these usually do not work
quire as planned. A has future cash flow problems Company B will be
left with an uncollectible receivable. Why are you keeping money in
the payroll account anyway??

Lance Mertz, CPA
Ketchikan, Alaska

On Wed, 30 Mar 2005 17:09:32 -0500, "Paul A Thomas" <(E-Mail Removed)>
wrote:

>
>"cld" <(E-Mail Removed)> wrote
>> How would you set up a procedure that would pay an employee (1099) from
>> ABC company's depleted payroll checking account with a manual check from
>> XYZ company payroll account? What journal entries would be generated.
>> The employee would still get a 1099 from ABC company at year end.

>
>
>As long as both companies agree...............
>
>
>"XYZ" would record a loan receivable from "ABC" in the amount of the check.
>
>"ABC" would record a loan payable in the amount of the payment, and debit an
>expense (you use "employee" and "(1099)" like they are interchangeable).
>
>I see nothing but problems down the road if these types of transactions
>continue.


 
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