Quicken & Other Budget/Accounting Software/Staff Advance

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Question
QUESTION: Hi,

What is the entries for staff advance off $50,000 to be deducted from their 2014 bonus (individually) that will be paid in Jan 2015?

What is the entries for revenue recognition?

ANSWER: Hi Farida

Im not sure what you mean by staff advance. Usually an advance refers to something
that has been paid before the expense has been incurred.

But if your intention is to pick up a WAGE Bonus Expense in 2014
  for payroll paid in 2015

Debit  Wages-Accrued Bonus (expense - you can code it to salaries too, however
         if you do that account will no longer tie out to your government payroll
         tax forms.

Credit Accrued Salary expense( account type = Current Liability)


Linda Saltz, CPA
Advanced Certified QuickBooks Advisor
http://www.qbalance.com


---------- FOLLOW-UP ----------

QUESTION: Hi,

The advance is a salary advance paid to the employee in conjunction with festive season which this salary advance will be deducted from their yearly bonus (2014 bonus) Which they will get in January 2015.

E.g One Employee salary is $1000. She took salary advance of $2000 for the festival. Her 2014 bonus entitlement is 3months. Her total bonus is $3000 to minus out the salary advance she took of $2000. So her take away nett bonus for 2014 will be only $1000. Please let me know the whole entries for this as well as bonus for 2014 paid in 2015.

You did not answer my question on the revenue recognition.
E.g Our marketing company approved budget for 2014 is $13M which the company will bill the regulator company every quarter. How do i make the entries so that the income will reflect in the P&l statement every month although we did not receive the fund yet from Regulator Company as they did not paid us on time.

ANSWER: Salary - wage advance.

This can pose a bit of a delema.Because we usually want the salaries to total up
to the government reporting at year end.  So I would post the wage advance to
salaries.

Next I would set up a CONTRA expense account (have the account number the next
available number after salaries Expense-Festive season and call in Salary advances
Credit Salary Advances
Debit Employee advances (other current asset)

Next year when the bonus is paid
Code the entire amount of the wages including bonuses to salaries.
Then do a reversing JE.
Debit Salary advances- festive Season
Credit Employee advances


xxxxxxxxxxxx          2014          Feb 2015
Employee advances       2000          0
     

Salariesxxxxxxx          3000          2000 ($1000 base +$1000 bonus)
Salary Advance          -2000          2000  (bonus expense paid last year)
Net salary expense       1000          4000   (1000 + 3000 bonus)


Linda Saltz

(I had to add xxx's into this scenario, trying to line up the columns)

---------- FOLLOW-UP ----------

QUESTION: Hi,

You did not answer my question on the revenue recognition.
E.g Our marketing company approved budget for 2014 is $13M which the company will bill the regulator company every quarter. How do i make the entries so that the income will reflect in the P&l statement every month although we did not receive the fund yet from Regulator Company as they did not paid us on time.

Answer
Sorry about missing that.

The easiest way to record the sale would be to create a monthly invoice
to the affiliated company in the amount of $1,083,333.33.  
On the invoice use an item that points to the appropriate revenue account.
When the payment is received apply the payment to the invoice.

QuickBooks and many accounting software packages have "recurring transaction types"
You could set up this invoice to automatically enter 1x per month.
In QuickBooks it is called a memorized transaction.   Set up the invoice and
from the Edit menu > select Memorize.


Or you can create a Monthly Journal entry and post to the Accounts Receivable as well.
Debit Accounts receivable
Credit Revenue

You would still use receive payment transaction type when the payment comes in.



Hope this helps,

Linda Saltz, CPA
Advanced Certified QuickBooks Advisor
http://www.qbalance.com
We sell and support QuickBooks Enterprise  

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