Pay employees from another company payroll account?

Discussion in 'Accounting' started by cld, Mar 30, 2005.

  1. cld

    cld Guest

    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.
     
    cld, Mar 30, 2005
    #1
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  2. "cld" <> 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
     
    Paul A Thomas, Mar 30, 2005
    #2
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  3. cld

    Bluepen Guest

    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" <>
    wrote:

    >
    >"cld" <> 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.
     
    Bluepen, Apr 2, 2005
    #3
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