JustAnswer > Finance
Ask A Question|Register|Login|Help
JustAnswer

Finance
Ask a Finance Question, Get an Answer ASAP!

Have your own Finance question?

4 Financial Professionals are Online Now
characters left:
Not a Finance Question?

Related Finance Topics:

  • Tax
    • ,
  • Cash
    • ,
  • Taxes
    • ,
  • Credit
    • ,
  • Income
    • ,
  • Employee
    • ,
  • Income Taxes
    • ,
  • Expense
    • ,
  • Deduct
    • ,
  • Bookkeeping
Bookmark and Share

Question

In double entry bookkeeping, how do I record the entry of payroll to my employee when tips are also involved. Example: $100 wages and $5 cash tips and $10 tips charged on the patron''s credit card. What are the debit and credit entries? Can I only deduct $100 as wage expense since the tips are not included in my sales? The payroll report (form 941) will show $115 to the employee but I only paid $100.

Submitted: 526 days and 6 hours ago.
Category: Finance
Value: $9
Status: CLOSED
+
Read More

Optional Information

Accepted Answer

Your employee should report cash tip income to you and you should include tip as part of their compensation. Tips are like wages, which are subject to p.r taxes and income taxes.

The journal entry should be:

p/r expense: $115(dr)
cash                      $5(cr)
P/R payable        $110.(cr)

On the day of p.r

P.R payable    $110.(dr)
cash                         $110(cr)

The journal entries above didn't take p/r tax into consideration.

Expert: mckeecpa
Pos. Feedback: 100.0 %
Accepts: 
Answered: 6/14/2008

Certified Public Accountant (CPA)

over 10 years of experience in accounting, tax, audit etc.

+
Read More

Related Finance Questions

  • I got a garnishment notice at work, I only make $900 a month...
  • You purchased a $1,000 five percent coupon bond that matures
  • This is something I have to complete for the school..UCLA &
  • i am on ssd and have just recieved some inheritance (monetar...
  • penn foster 06160600 and 06160700
  • 2. Consider Allied Signal Corporation's 9 7/8 percent bonds
  • The Ewing Distribution Company is planning a $100million exp...
  • This is an Alternative Minimum Tax question. Suppose a pers...



Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.
Question List | Become an Expert | Terms of Service | Security & Privacy | About Us
© 2003-2009 JustAnswer Corp.