October 21, 2017 at 3:23 am #8509SarahParticipant
We recently sold a company vehicle for $5000 and I’m not entirely sure how I enter the deposit.October 21, 2017 at 3:38 am #8510The Happy BookkeeperKeymaster
You would enter that deposit towards your Vehicle asset account. Did you collect GST/HST on that? (For a sale of a business asset you are required to collect the GST/HST if the business is registered for GST/HST). If you did, then you would separate that amount out. You can create an invoice or deposit, or do it with a journal entry. If your bookkeeping software allows you to create a deposit or invoice and instead of using a sales account or item, lets you select your Auto Asset account, that is what you need to put this sale towards. If not, you can use a journal entry; you would Debit the bank for $5,000, and you would Credit your Vehicle Asset account for $5,000. If there was GST/HST, for example, you would debit the bank for $5,000, you would credit GST/HST collected ledger account for $652, and you would credit your Vehicle Asset account for $4,348. I also put in the description or memo the Details of the entry about Asset sold. For a Vehicle I put the year, make, and model, plus the last four of the VIN. This way, when you look at the history of your asset ledger accounts, you can see all the comings and goings quickly and easily! (Fantastic for a company that’s been around for years, and a new account says, “so, where’s your asset list?”)
There is no need to create a new asset account for each asset purchased. Limit your asset accounts to the classes, or categories, of assets; Vehicle, Equipment, Buildings. (You can make a few more specific accounts for your needs if you choose, such as Farm Equipment, Construction Equipment. But do not create an asset account for *each* asset purchased. Just make sure to put in the detail of what asset was sold or purchased when you create an entry).
Also, take a photocopy of the bill of sale, and put it aside an a file for the accountant for Year End. Keep a file of a photocopy of all asset purchases and sales for the year ready to give the accountant. When the accountant collects the info for the Year End taxes, he will need to know what assets you purchased and sold, and he will update the tax file accordingly. Then any adjusting entries are sent to you with the Corporate Tax return to enter into the system.
Hope that helps!
Have a great day!
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