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<p>Can a Subsidiary pay the payroll of it parent company's employees, given the employees are working with subsidiary. Consider that GOSI is being paid by parent . </p> <p>Could this lead to any legal Complications ?</p>
.........Yes, you can
$10000(Debit / account dividend paid in advance ..... profit for the parent company (current assets)
$10000( (Credit / Bank
The total value of money paid EXP. salaries
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Is31.12.2014
To prove the distribution of profits account
$10000(Debit / profit and loss account (income statement)
Credit / the distribution of profits to the parent company account $10000 FOR THE YEAR ENDED13/12/2014 ..... (Current Liabilities)
The value of the parent company's profits
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adjustment- To prove payment to the parent company
Debit / the distribution of profits to the parent company account$10000 FOR THE YEAR ENDED13/12/2014 ..... (Current Liabilities)
Credit / account dividend paid in advance ..... profit for the parent company $10000 (current assets) //ACC. receivables