Accounting Comic, Accounting Cartoon, Accounting Joke
Accounting Comic, Accounting Cartoon, Accounting Joke Form more accounting information see website http://accountinginstruction.info/cou…
Partnership Closing Process – Closing Process for Partnership In Excel
The accounting closing process for a partnership is much the same as the accounting closing process for other entities like a sole proprietorship or corporation except that the last to steps will involve different accounts, different equity accounts. The goal off the closing process is to close out temporary accounts including income statement accounts of revenue and expense accounts and draws. The closing out of temporary accounts prepares the trial balance for the next time period the next month or year. We will have a four step closing process. The first step will close revenue to an income summary account. The second step will close expenses to and income summary account. The third step will close the income summary account, how having an amount equal to net income, to the related capital accounts according to their profit sharing agreement. The fourth and final step will close out draws to the related capital accounts. For more accounting information see website. http://accountinginstruction.info/cou…
Issuing Stock for Cash – How to record the journal entry for the issuing of common stock for cash
Issuing common stock is how a corporation can generate capital, generate money, for use in the company. Issuing common stock provides stockholders with an equity interest in the company. Mot stock sales we think of on a stock exchange are trades between investors instead of stock issued from the company. We recording stock issued from the company we the company will receive cash from investors. The journal entry related to issuing stock for cash will include a debit to cash. The debit will be calculated as the amount of stock issued times the market price. We will issue stock for as much as we can, the market price. We will credit common stock, increasing equity, but not for the same amount as cash received if there is a par value. We will credit common stock for the amount of stock issued times the par value. The difference between the cash and common stock will be credited to additional paid in capital. For more accounting information see website. http://accountinginstruction.info/cou…
Cash Dividends – How to record a cash dividend – Journal entry for cash dividend
Cash dividends are similar to draws for a sole proprietorship or partnership except with some exceptions. Unlike dividends draws can differ from partner to partner and each partner has control over the amount they with to draw. Dividends still represent money going from the business to the owners, in this case the owners being stockholders. The dividends must be uniform, however. There must be an equal amount of dividend distributed to each stock. The process of recording a dividend is longer as well. We first need to declare a dividend. At the date of declaration we will enter the journal entry decreasing retained earning or increasing dividends in the equity section and increasing a liability account to represent the cash owed to the stockholders. We will then pay the stockholders at a later date, decreasing cash with a credit and decreasing the payable account.
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Partnerships Liquidation Partner Does Not Pays Partnershi
Partnership liquidation will go through the closing process of a partnership. We will work the partnership closing process in Excel. Partnership liquidation needs to happen in specific step, a liquidating order, to avoid problem. The first step in the partnership liquidation is to sell the assets and recognize any gain or loss on the sale. If this steps results in a partner capital account being less then zero, or flipping from a credit balance to a debit balance, we need to see if we can collect money from the partner with a negative balance. If the partner will not pay we will need to allocate the negative capital account to the remaining partners to continue. Then we can pay off liabilities. Once we are left with only cash and capital we can pay off the partners.
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Partnership-New Partner Added Easy Question
Adding a new partner to an existing partnership can be a more difficult process then providing a new equity interest in a corporation. One reason is the at the partnership less standardized in term of stock verses capital accounts. The partnership is also not a separate legal entity so any significant change in ownership can cause the partnership to terminate and then reestablish.
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Form 940 Employer’s Annual Federal Unemployment (FUTA) Tax Return – How to fill out
Form 940 is the Employer’s Annual Federal Unemployment (FUTA) Tax Return, not to be confused with Form 941 which are quarterly tax returns. The annual form 940 payroll tax return report the federal tax of federal unemployment or (FUTA). Because the form number is close to the form number of the quarterly form, form 940 and form 941, it is easy to think they are related, that the annual payroll tax form 940 summarizes the quarterly payroll tax forms 941, but this is not true. Form 941 reports federal income tax (FIT), social security, and Medicare while the yearly payroll tax form 940 reports federal unemployment (FUTA) tax. Unlike the other federal payroll taxes the IRS only requires the reporting of FUTA yearly rather then quarterly, possibly because of the smaller dollar amount involved. FUTA is an employer only tax, meaning it does not come out of the employee gross pay to arrive at net pay. For more accounting information see website. http://accountinginstruction.info/cou…
Medicare Tax Calculation – How to Calculate Medicare Payroll Taxes
Medicare is a type of payroll tax that employers need to calculate when processing payroll Medicare has both an employee and employer portion. In other words, employers will need to deduct Medicare taxes from employee wages when calculating net wages. The rate is currently 1.45% of gross wages. Unlike social security Medicare does not have an upper cap where taxes stop being calculated on wages. The employer will also have to pay 1.45% out of business profits as well. For more accounting information see accounting website. http://accountinginstruction.info/
Preferred Stock Introduction – What is Preferred Stock?
Preferred stock can be misleading because the name preferred stock makes it sound better on all ways t the more traditional common stock. In reality the type of stock we would prefer to have depends on circumstance. The reason preferred stack is called preferred is because it preferred stockholder have first clam to things like dividends or payment on liquidation of a company. However the amount of dividend and payment is limited to the terms of the preferred stock. Common stock will not receive dividends until the preferred stock holders are paid but if the dividends paid are large common stockholders may get paid more. In other words, preferred stock provides more protection against loss by allowing for a primary claim to assets over common stockholders, but common stockholder may be looking for long term growth and will typically benefit if there is long term growth. For more accounting information see website. http://accountinginstruction.info/cou…