Tut, kindly explain how to handle this transaction in Manager.
Vendor A provides canteen services for a company
Vendor A invoices weekly based on the tickets used. A ticket cost NGN400 each
a. The company normally subsides the meal ticket for staff
b. The company prints meal tickets in booklets
c. A booklet contains 20 to 22 pieces of meal tickets each, depending on the number of working days in a month.
d. The subsidy Company pays for staff ticket is dependent on staff level
e. The company pay lesser money per ticket for Senior Staff than for Junior staff
Staff pays in two ways:
a. By direct deduction through payroll (for staff that bought a booklet of meal ticket)
b. By paying cash over the counter for a ticket at the point they want to eat at the Canteen.
Please see the example below:
A. Vendor A invoices the company for 400 tickets total NGN160,000 for a week.
But total bills at the end of the month is 1350 tickets totaling NGN540,000.
B. Company pays Vendor A the sum of NGN160,000.
C. The sum of NGN70,000 was deducted at sources from payroll at the end of the month.
D. The sum of NGN25,000 was the total cash sold over the counter and paid into the Bank.
Note that the Company pays the Vendor promptly each time it presents its weekly invoice.
Not all staff exhaust their booklet at end of each month.
Please how will Manager account for this treatment in terms Dr & Cr:
Deduction at source from staff payroll
Cash sold from tickets over the counter
Meal Expense account (Profit / Loss)