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summersoltys
Joined: 12 Aug 2008
Posts: 12
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| Posted: Tue Aug 12, 2008 11:17 am Post subject: Restaurant / Bar accounting |
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The restaurant I work for sells champagne for $140 a bottle. For every bottle a server sells they get $20. For this transaction we credit champagne sales for $140 and debit cash for $120 and promotional advertising for $20.
I was wondering if this was incorrect...I was thinking this would mean that $20 the server is making is counting as alcohol sales and the restaurant is paying alcohol taxes on it. If anyone has an idea of a better way to do this please let me know. |
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stasia2003
Joined: 25 Feb 2008
Posts: 199
Location: FL
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| Posted: Tue Aug 12, 2008 11:54 am Post subject: Re: Restaurant / Bar accounting |
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summersoltys wrote: The restaurant I work for sells champagne for $140 a bottle. For every bottle a server sells they get $20. For this transaction we credit champagne sales for $140 and debit cash for $120 and promotional advertising for $20.
I was wondering if this was incorrect...I was thinking this would mean that $20 the server is making is counting as alcohol sales and the restaurant is paying alcohol taxes on it. If anyone has an idea of a better way to do this please let me know.
That $20 sounds like commission to me and not advertising. If you were giving away tiny bottles of wine as samples like the Bacardia liquors(I can use one now... :lol: ), that's promotional.
I do have a question though. Is that commission paid out right away in cash to the server or does it go on the paycheck? If it goes on the paycheck here are the three separate transactions.
Sale of wine
Debit - Bank 140.00
Credit - Alcohol/Beverage Revenue 140.00
To record the commission
Debit - Commissions Expense 20.00
Credit - Commissions Payable 20.00
To record the payout of commission
Debit - Commission Payable 20.00
Credit - Bank 20.00
There may be a more simplified way to do it. Others will probably jump in. :D |
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summersoltys
Joined: 12 Aug 2008
Posts: 12
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| Posted: Tue Aug 12, 2008 12:13 pm Post subject: |
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| They are paid out in cash at the end of the night... |
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irsfixer
Joined: 24 Jul 2007
Posts: 167
Location: Houston
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| Posted: Tue Aug 12, 2008 1:25 pm Post subject: |
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summersoltys wrote: They are paid out in cash at the end of the night...
The $20 is compensation to the seller and needs to be on their pay checks. The way you are handling it is very wrong. This sounds like a strip club. I'm just sayin. |
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summersoltys
Joined: 12 Aug 2008
Posts: 12
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| Posted: Tue Aug 12, 2008 1:45 pm Post subject: |
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| NOT A STRIP CLUB....We are just a really small restaurant and the owners started this type of compensation recently and it just seemed not right to me. I knew that they shouldnt be paying sales tax on it and that the servers and the restaurant should be paying payroll taxes... I was trying to figure out an alternative way to suggest to them to handle it....They are a little hard to approach so I wanted to make sure I knew what I was talking about... |
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irsfixer
Joined: 24 Jul 2007
Posts: 167
Location: Houston
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| Posted: Tue Aug 12, 2008 1:48 pm Post subject: |
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summersoltys wrote: NOT A STRIP CLUB....We are just a really small restaurant and the owners started this type of compensation recently and it just seemed not right to me. I knew that they shouldnt be paying sales tax on it and that the servers and the restaurant should be paying payroll taxes... I was trying to figure out an alternative way to suggest to them to handle it....They are a little hard to approach so I wanted to make sure I knew what I was talking about...
That is disappointing. I was prepared to offer free onsite consultations. |
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stasia2003
Joined: 25 Feb 2008
Posts: 199
Location: FL
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| Posted: Tue Aug 12, 2008 1:50 pm Post subject: |
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irsfixer wrote: summersoltys wrote: NOT A STRIP CLUB....We are just a really small restaurant and the owners started this type of compensation recently and it just seemed not right to me. I knew that they shouldnt be paying sales tax on it and that the servers and the restaurant should be paying payroll taxes... I was trying to figure out an alternative way to suggest to them to handle it....They are a little hard to approach so I wanted to make sure I knew what I was talking about...
That is disappointing. I was prepared to offer free onsite consultations.
:lol: :lol:
Don't be too disappointed. Do you need a hug? *hug* |
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stasia2003
Joined: 25 Feb 2008
Posts: 199
Location: FL
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| Posted: Tue Aug 12, 2008 1:59 pm Post subject: |
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summersoltys wrote: They are paid out in cash at the end of the night...
Like Mike said, it should be on their paychecks, at least if they want to stay out of trouble with the IRS. Let one employee get pissed off, they will sing like a canary to the tune of penalties and interest. :shock:
I'm sort of a disgruntled ex-employee of my last job(but I'm almost over it) and thank God I don't have to work for anyone ever again. Anyway, I can blow the whistle on them if I wanted to. I'm a nice person so I won't say a word. They have full time subcontractors working for them that are obviously employees. I know this because I was the one cutting their "vendor" checks.
Tell them to do it right and include it on their paychecks. |
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summersoltys
Joined: 12 Aug 2008
Posts: 12
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| Posted: Wed Aug 13, 2008 5:53 am Post subject: |
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| Thanks for the help guys...I am gonna talk to them and see if I can talk some sense into them... |
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summersoltys
Joined: 12 Aug 2008
Posts: 12
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| Posted: Wed Aug 13, 2008 6:23 am Post subject: |
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| Hey before I talk to them, I have a second question someone may be able to help me with. Each year we put on a huge Gala. The owners have made a deal with the taxi companies that for every person they bring to the Gala we give them $5. They charge a $50 entrance fee...I looked at the books from last year and for each person brought by a cab they credited entrance fees for $50 and debited cash for $45 and taxi fee for $5. Please give me any suggestions you can offer to account for this transaction. The Gala is coming up in a couple of weeks and I would like to account for it correctly. |
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irsfixer
Joined: 24 Jul 2007
Posts: 167
Location: Houston
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| Posted: Wed Aug 13, 2008 6:26 am Post subject: |
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summersoltys wrote: Hey before I talk to them, I have a second question someone may be able to help me with. Each year we put on a huge Gala. The owners have made a deal with the taxi companies that for every person they bring to the Gala we give them $5. They charge a $50 entrance fee...I looked at the books from last year and for each person brought by a cab they credited entrance fees for $50 and debited cash for $45 and taxi fee for $5. Please give me any suggestions you can offer to account for this transaction. The Gala is coming up in a couple of weeks and I would like to account for it correctly.
That is fine as long as they do not pay any one taxi driver more that $600. Otherwise they need to send them a 1099. |
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summersoltys
Joined: 12 Aug 2008
Posts: 12
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| Posted: Wed Aug 13, 2008 7:37 am Post subject: |
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| Ok....They have agreed to change the way there are doing this to commission...If anyone has any ideas on my best course of action to fix the past several months in which these transactions have been recorded incorrectly and not been taxed I would really appreciate it.... |
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irsfixer
Joined: 24 Jul 2007
Posts: 167
Location: Houston
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| Posted: Wed Aug 13, 2008 7:41 am Post subject: |
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summersoltys wrote: Ok....They have agreed to change the way there are doing this to commission...If anyone has any ideas on my best course of action to fix the past several months in which these transactions have been recorded incorrectly and not been taxed I would really appreciate it....
How much money are we talking about so far for the year? |
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summersoltys
Joined: 12 Aug 2008
Posts: 12
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| Posted: Wed Aug 13, 2008 8:07 am Post subject: |
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| They own 5 small restaurants and were doing it at all of them...Maybe close to $10,000. |
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summersoltys
Joined: 12 Aug 2008
Posts: 12
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| Posted: Wed Aug 13, 2008 8:20 am Post subject: |
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| I actually just ran a report and it is closer to $5,000 |
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