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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16544
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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troubled company deferred partial salaries from 6/1/13 to 5/30/14.

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troubled company deferred partial salaries from 6/1/13 to 5/30/14. Gave option to employees to use PTO to mitigate pay cut. I'm guessing that we still book the full amount of the deferral: debit payroll expense, credit deferral payable. Is that correct?

Megan C :

Thank you for your question, and thanks for using JustAnswer.com

Megan C :

Yes, you are correct. If the company deferred payroll, they should book the deferral as a liability on their books

Megan C :

So, they incurred the payroll expense but have not paid it yet. It's a debit to payroll expense and a credit to salaries or deferral payable.

Customer:

Thank you, XXXXX XXXXX guessing that the only account impacted by the use of PTO is the vacation accrual. Is that another lucky guess?
Thank you!

Megan C :

Yes, that is correct, the vacation accrual would be impacted by the use of PTO

Customer:

Finally, do you practice in California? Is there anything impacted by state law/regulations here? We are only talking about people whose reduction was to $100k annually, so there shouldn't be any wage & hour issue...

Megan C :

Thanks, XXXXX XXXXX practice in California so I could not speak to state laws. I would post that in an employment law question.

Megan C :

Is there anything else that I can assist you with today?

Customer:

nope. THank you for the prompt responses!

Megan C and other Finance Specialists are ready to help you
Thanks, Jeff for your positive rating. Please come back and visit me any time you have a question that needs answered. It was a pleasure working with you today!

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