Salary

Save Share

This query is : Resolved

SHIRAS (Querist)

05 March 2011 our company is Holding company. It have 4 Susidiary Company and accounts department is shared service for all the 4 Company. The thing is Company " A" paid to salary of " B" Company employees Rs1,50,000. Then one week later the company "B" return that money to Company "A". So How to enter the Entries. i am in trouble. Please help

JIGAR DALAL

JIGAR DALAL (Expert)

09 March 2011 While making payment to Employees of "B" Entry Will be as follows

1) Salary Exps. A/c Dr.
Salary payable A/c Cr.
(Book as Exps. of Company)
2) Salary Payable A/c Dr.
Bank A/c Cr.
(For making Payment)
3) B Company A/c Dr.
Salary Exps. A/c Cr.
(Reimbursement of Exps, from resp. Company)

At the Time of payment recd. from "B" Company, following entry will be passed

Bank A/c Dr.
B Company A/c Cr.

SHIRAS

SHIRAS (Querist)

09 March 2011 Thanks for your Reply

Can i made entry like following

For making Payment Company B

Company B Dr 150000
To Bank(Comp.A's Bank a/c)150000

( Being payment to B comapany employees salary)If any other supplier payment also do this entry.

Refund from Company B

Bank (Comp.A's Bank a/c)150000
To Comp.B's Bank a/c) 15000
(Refund recieved from Com.B)

At this time Company B will be Current Assets of A's Books. and Com.A will be Current liabilty in ccom.B books.

This entries right? tell me

JIGAR DALAL

JIGAR DALAL (Expert)

09 March 2011 Yes, U can pass entries this way.
If any supplier payment done by A company on behalf of B Company then also same entry will be passed
"B' Company Account will opened as Sundry Debtors under the head Current Assets in the books of A Company and "A" Company A/c will opend as Sundry Creditors under Current Liabilities in the books of "B" Company

SHIRAS

SHIRAS (Querist)

09 March 2011 Thanks for reply

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now