How do I prepare these journal entries?

Prepare the journal entries to record the reimbursement of petty cash fund?

• Prepare the journal entries to record the reimbursement of petty cash fund. General ledger account Petty cash has a balance of 3,000.00 Coins and Currency - 152.00 An IOU from Allison, an employee for cash advance- 740.00 Petty cash vouchers for the following: Softdrinks- 200.00 Rice - 143.50 Papers - 1,700

• Answer:

  There are five main transactions in the QuickBooks software involving employees. Each transaction may have more than one purpose. We will look at the main purposes for each and mention a few minor ones with a small description for each. These purposes include paychecks, liability checks, liability adjustments, year-to-date adjustments and non-payroll transactions. Difficulty:Moderate Instructions Things You'll Need QuickBooks software Computer Employee time sheets Notes on employee advances Receipts for employee reimbursements Employee Transactions 1 Create the employee paychecks. The easiest, most time-economical way of creating employee paychecks is to use the Intuit payroll subscription service that will print all payroll forms, including checks and tax forms. Click the "Employee Center" button. The tabs on the left side of the screen will include employees, a list of all employee names, transactions, a list of all transactions in each category, and payroll. Click on the "Payroll" tab. If the "Payroll" tab isn't present, you will have to activate "Manual Property Entry." 2 Create the liability checks. If you are using the Intuit payroll subscription, these transactions are entered for you in the liability column. These liability checks include payroll taxes, as well as unemployment taxes for federal and state and medical or other insurance items that are deducted from employee checks. If you are entering these transactions manually, click on the "Help" button to get step-by-step instructions regarding payroll liability checks. 3 Create the liability adjustments. A liability adjustment is made when there has been a change in percentages for a payroll tax through either a W-4 change or a change in unemployment tax percentage. If these changes occurred on a date before the payroll checks were issued and have not been made in QuickBooks, an adjustment may be needed. Calculate the difference between what was paid and what was supposed to be paid. Create a check for those amounts to the employee. 4 Enter the year-to-date adjustments. If you change from a payroll company to the Intuit payroll services mid-year and you are not anticipating the payroll company to finish the job and send your W-2s out you will have to do a year-to-date adjustment. Obtain the final report on all gross pay and taxes paid for each employee and enter that lump sum as one payroll check for each employee. You will have to create a "fake" bank account called an "Adjustment Bank" so that you can "pay" these checks. Keep track of these totals and subtract them from your end of year payroll tax forms so you don't pay twice. 5 Create nonpayroll transactions. These include employee loans, employee advances and reimbursements. Obviously, you don't want to have payroll taxes taken out of a check you issue for reimbursements or loans. Create a check for the employee in question. A small warning window will pop up telling you that you should be creating a payroll check, not a regular check, for an employee. Ignore the window and create the check. Make sure to enter loan, reimbursement, etc., in the memo section of the check