Author: Bob Steele CPA

Payroll Expense Journal Entry-How to record payroll expense and withholdings

Payroll expense and wihholdings is one of the most complex journal entries that a company will see regularly. Part of the reason for the complexity in payroll journal entries is the legal requirement for the employer to withhold taxes and provide optional benefits. When thinking about payroll tax journal entry it is useful to start… Continue reading Payroll Expense Journal Entry-How to record payroll expense and withholdings

Corporation Introduction – What is a Corporation & Pros and Cons of Being Incorporated

We will discuss the corporation for of business entity. As we think about he corporate form of business it is useful to make comparisons to other forms of business entities like a sole proprietorship and partnership. We also have other entities like LLC and S corporation. I think of business ententes in a similar way… Continue reading Corporation Introduction – What is a Corporation & Pros and Cons of Being Incorporated

Stock Dividends & Stock Split – Are Stock Dividends & Stock Splits the Same

We will discuss stock dividends and stock splits, similar but different processes. Stock dividends are similar to normal dividends in that the corporation is giving part of its earnings to the stockholders, to the owners. We will have a date of declaration where we record the dividend and a liability and will then issue the… Continue reading Stock Dividends & Stock Split – Are Stock Dividends & Stock Splits the Same

Form 941 – Quarterly Payroll Tax Form – How Fill Out

The form 941 is a quarterly payroll tax form. Form 941 is filed four times a year and report payroll liability and deposits for federal income tax (FIT), social security, and Medicare, the FICA taxes. Form 941 is not used to calculate what we owe so we can make quarterly payment. Form 941 is an… Continue reading Form 941 – Quarterly Payroll Tax Form – How Fill Out

Stock for Cash – Financial Accounting Transaction Stock Part Value for Cash

The financial accounting transaction of issuing stock for cash is a corporate accounting transaction similar to a transaction for a sole proprietorship or partnership of owner investments. The corporation issues stock to receive capital investment from the owners, the stockholders. The journal entry for the sale of stock will include a debit to cash and… Continue reading Stock for Cash – Financial Accounting Transaction Stock Part Value for Cash

Reconciling Year End Payroll Forms – Payroll Tax Forms 941, 940, W-2, W-3

Reconciling the year end payroll tax forms will take a look at the payroll forms we put together including the quarterly payroll tax forms 941, the yearly payroll tax form 940, the yearly payroll tax form W-2, and the yearly payroll tax forms W-3. It is very common for problems to become apparent at the… Continue reading Reconciling Year End Payroll Forms – Payroll Tax Forms 941, 940, W-2, W-3

Statement of Retained Earnings

The statement of retained earnings will show the activity for retained earnings over the period covered. The statement of retained earnings will start with beginning retained earnings be increased by net income and decreased by dividends. The statement of retained earnings is similar to the statement of owner’s equity or the statement of partners’ equity.… Continue reading Statement of Retained Earnings

Partner Leaves Partnership Cash Greater then Capital Acco

The journal entry for a partner leaving a partnership. When a partner leaves the partnership we will need to take the partnership capital account down to zero with an adjusting journal entry. The partners leaving the partnership will generally is paid in some format, topically with cash. It would be easiest of the partner gets… Continue reading Partner Leaves Partnership Cash Greater then Capital Acco

Federal Income Tax FIT – Percent Method – How to calculate FIT using percent method

Calculating federal income tax FIT can be confusing because it is not a flat tax but a progressive tax. There is software to help and the IRS provides table to help with the process. To use the table s we nee marital status, allowances, and pay periods. If the income it over a certain dollar… Continue reading Federal Income Tax FIT – Percent Method – How to calculate FIT using percent method