# small CS

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```					Small Dollar Overdraft                                                                     FIN.670 Class Handout

To move a "small dollar" overdraft (currently defined as less than \$500 in total) one makes an entry in
aggregate, rather than transferring specific charges. The amount transferred relates to the direct cost portion,
and the accounting system automatically adjusts the indirect cost portion. To calculate the amount of the
transfer, take the total overdraft and divide it by 1 + the project's indirect cost rate. This amount is transferred
to another PTA (not a cost-sharing PTAs) by crediting Expenditure Type 56135 on the PTA with the overdraft,
and debiting that same Expenditure Type on the other PTA. This is entered as a "NEW" journal, not a transfer

The example below deals with a total overdraft of \$475. The following formula is used to calculate the entry:

Calculated Expenditure
Total        Project's Direct Cost   Type
overdraft     IDC rate   Transfer    to use
Example, showing formula            \$475.00          55% =475/(1+.55)  56135
Example, showing amount             \$475.00          55% \$     306.45  56135
Calculation Template:
(fill in colored cells)                                      \$        -        56135

The following example displays the calculation and the effects of the small dollar overdraft entry made to
Expenditure Type 56135. If desired, you may enter the amount of your overdraft and your project's indirect cost
rate in the colored cells above and the template will calculate the amount of the entry needed.
Example small dollar overdraft                                                           FIN.670 Class Handout

PTA=1018092-100-PAEVH
(NIH 5R01 AR45192-03 KHAVARI-Gene Regulatory Mechanisms of Epidermal Growth)
Before                           After    Reported

Salaries                                      ########                      10,000.00     10,000.00
Fringe                                        2,600.00                       2,600.00      2,600.00
Salary + Fringe                               ########                      12,600.00     12,600.00

Travel                                         1,000.00                      1,000.00      1,000.00

Supplies                                        900.00                         900.00
Expenditure Type 56135                             -            (306.45)      (306.45)
Total Supplies                                  900.00                         593.55        593.55

Total Direct                                  ########                      14,193.55     14,193.55

Indirect (55%)                                 7,975.00     automatic        7,806.45      7,806.45

Total                                         ########                      22,000.00     22,000.00

Budget                                        ########                      22,000.00     22,000.00

Overdraft                                       (475.00)                          -             -

Total overdraft                                 (475.00)
Divide by 1+ IDC rate                              1.55
The entry is made only for the direct cost
"Direct" transfer                               (306.45) portion - the indirect costs follow
automatically at the rate * direct amount.

Automatic indirect transfer                     (168.55) (at 55%)

Total effect on PTA                             (475.00)

Note: This entry is a NEW journal, not a TRANSFER journal. It is not transferring a specific transaction
between PTAs. Rather, it is moving a calculated dollar amount in order to eliminate the overdraft.

Entry:                                                                     Expenditure
Description                                               PTA                 Type            Debit        Credit

OD Cleared to PTA 1012003-100-GAAAA   1018092-100-PAEVH                      56135                         306.45
OD Cleared from PTA 1018092-100-PAEVH 1012003-100-GAAAA                      56135           306.45

Purpose:
To clear small dollar overdraft from sponsored PTA 1018092-100-PAEVH to gift PTA 1012003-100-GAAAA.

```
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