Personal Finance

John Pippy · Guest

Here is the Situation.

I just started a distribution(confectionary wholesale) business. I
purchased a van for $36,500 plus HST of $ 5475.00 for a total of $41,975.00

My payments are $318.00 bi-wkly

How do I enter this into QuickBooks (I am thinking a fixed asset account,
but I am not sure of how to do this) I also want to be able to show the HST
paid for my HST return. I also want to be able to enter in the pi-wkly
payments.

Also finally, how about the deprecation on the van, how would I set this up
in QuickBooks?

Thanks,

JP

--

Guest

I'm not 100% sure about this, but I think that the Fixed Asset Manager is a
feature that's only in the Accountant version of QB. If you don't have that
version, you'll be doing the depreciation calculations manually.

Generally, you should set up 2 accounts for a depreciable asset, one to
track the cost, one for the accumulated depreciation. The accumulated
depreciation s/b a sub-account of the asset cost account. I actually set up
3 accounts for a depreciable asset. One is the main account that gets no
entries, the other 2 are sub accounts of the main account, one for the cost,
one for the accumulated depreciation. It ends up looking like this:

Fixed Asset - Van
Van - cost
Van - accumulated depr

"John Pippy" <pippypark@gmail.com> wrote in message
news:kqT3f.108778$Ph4.3313426@ursa-nb00s0.nbnet.nb.ca...

!-! · Guest

As explained by another, you need at least 2 Fixed Asset accounts for
each class of assets (or for each major asset in some cases if you
prefer), one for the cost and the other for accumulated depreciation.
Some users like to make these sub accounts as described in another
response, others like to make all the "cost" accounts subsidiary to
one Fixed Asset Costs account, and all the accum. deprec. accounts
subsidiary to another Accum Depr account, but neither method is
required; your choice among the 3 methods is a matter of personal
preference (yours or your accountant's).

You will also need at least one Expense account. The entry is:
Debit Depreciation Expense
Credit Fixed Asset Accumulated Depreciation.
Some use just a single expense account, others use a separate account
for each class of assets.

Canadian QuickBooks versions do not calculate depreciation, not even
those editions which include the Fixed Asset Manager, so you must do
these calculations manually and enter them by Journal Entry. Most
users calculate depreciation once annually at year-end, others make
monthly entries if the amounts are really significant. Note that
depreciation for accounting purposes is not necessarily the same as
"capital cost allowance" for income tax purposes. If you are
uncertain, don't worry about it until your first year-end - then ask
your accountant.

HST is not part of your asset cost, because you claim a credit for it
on your HST return. You claim the HST on the purchase, not on the
monthly payments. Your monthly payments consist of an interest
expense amount and a repayment of loan principal. Some users record
the correct monthly amounts of interest and principal according to an
amortization table, others record a consistent monthly entry and make
a correction at year-end.

If you have no previous bookkeeping training or experience these
entries may be more complicated than you expect. For example - the
determination of whether any part of your total expenditure can or
should be recorded as an expense rather than part of the cost of the
asset, which in turn affects your depreciation; amortization of the
loan principal; deciding whether to make accurate monthly entries for
depreciation and interest. If you are unsure, just make simple
entries that you can understand, then ask your accountant at or before
year-end.

"John Pippy" <pippypark@gmail.com> wrote in message
news:kqT3f.108778$Ph4.3313426@ursa-nb00s0.nbnet.nb.ca...

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