Accounting & Bookkeeping & Small Business Forum

Accounting and Bookkeeping Questions Forum :: Business space usage and claiming

Author: kingno1
Subject: Business space usage and claiming
Posted: Tue Jan 06, 2009 6:17 pm (GMT -7)
Topic Replies: 0

Hello, I started an S corp and working directly for a company.
I live in a 3 bedroom apartment. How much space can I claim as RE for office. How does it work with utilities?

Also, a tax question if you know the answer.. I understand that food and entertainment can only be claimed 50%. Is that the same case with the travel expenses as well?
TIA.

Accounting and Bookkeeping Questions Forum :: RE: Small Business Income Statement

Author: dp1903
Subject: Re: Small Business Income Statement
Posted: Tue Jan 06, 2009 5:59 pm (GMT -7)
Topic Replies: 2

krymer wrote:

Hello,

I am trying to create an income statement for my father's landscaping business, I believe he is incorrectly attributing expenses, etc. Under assets he has items such as a zero turn lawn mower, trimmer, aerator, rakes, shovels, etc but shouldn't he be depreciating there value every year? Under expenses he has usual items like labor, fuel, advertising, but he also has business cards, clothing, office supplies, oil, shouldn't these be in assets? should these things be depreciated as well? He also has loan payments he made toward the zero turn mower he purchased a few years ago, are the payments toward an asset considered an expense? He also has customer material items like Fertilizer, mulch, dirt, ect that he has under expense, however whatever he pays for these materials, he then applies that to his invoices for his customers, so it really doesn't seem like an expense. Thank You.

An asset is something of value which lasts longer than one year, generally speaking. But items of a small cost, such as office supplies, business cards, rakes, shovels, clothing, etc. can be charged immediately to expense. It just depends where you want to draw the line on what is an asset and what is an expense in this regard, $100, $200, or $300. It is possible to purchase things like staplers, phones, etc which have a useful life of longer than one year but whose cost is not worth the time to depreciate them as assets, hence you expense. Business cards, office supplies, oil, etc. sound like legitimate expenses to me. Expenses are used up to generate revenue. His lawnmower and power tools are properly recorded as fixed assets and should be depreciated. Shovels, rakes and items of that nature I might expense, depending on their cost.

Purchasing items to be used for his customers, such as fertilizer, dirt, etc, are reimbursable expenses and should be classified as expenses since he will charge for these items on his invoices as revenue, I assume. That way the revenue for a job [which includes the cost of fertilizer etc.]is matched with the expenses, including fertilizer, dirt, etc. You don't know how much profit or loss you had on a job without classifying these items as expense and rebilling for them to the customer as revenue.

When he makes the loan payment, it is comprised of two things, loan principal being paid off plus interest expense. You need to set up an amortization schedule showing each month's principal and interest paid off and use that to record the payment.

Here's an example of recording the purchase of a lawnmower on credit:

ZTR Lawnmower debit $4,000 [fixed asset]
Lawnmower loan payable credit $4,000 [liability]

IF the loan is for say 3 years at 10% interest then the monthly payment would be $129.07 and the first payment would be recorded as:

Lawnmower loan payable debit $ 95.74
Interest Expense debit $33.33
Cash credit $129.07

The 95.74 reduces the $4,000 loan to $3904.26 and the interest expense goes on the income statement and reduces revenue.

The $4,000 going to ZTR lawnmower stays on the books at $4,000. An accumulated depreciation account for the lawnmower goes underneath this account and that's where the depreciation is recorded. Example:

Depreciation expense, ZTR lawnmower debit $800 [first year's dep. exp.]
Accumulated Depreciation, lawnmower credit $800

Using tax depreciation these amounts will be different than straight line depreciation.

Work at Home, Work From Home Forum, Home Business Forum :: QB online edition: Adjusting transactions when Reconciling

Author: KKrish
Subject: QB online edition: Adjusting transactions when Reconciling
Posted: Tue Jan 06, 2009 3:10 pm (GMT -7)
Topic Replies: 0

I am trying to help my brother with his bookkeeping for his small maintenance and repair business (industrial equipment). He resides in California and I am in Michigan. He uses Quickbooks online edition. He receives and deposits payments from clients while I process vendor invoices and payments. I also reconcile and budget for him. I do not have any formal training in bookkeeping.

My question is: When making multiple deposits at one time through the ATM, my brother on a few occasions has added incorrectly or written the incorrect amount on his deposit slip; therefore, when reconciling in QB it shows the out-of-balance and gives the option to make an adjusting transaction to correct. Sometimes the bank has made the adjustment on their end, but when it is dealing with amounts less than $1.00 they don't. How should I fix this in QB and with the bank?

Thanks!

Accounting and Bookkeeping Questions Forum :: RE: Tenant Allowance

Author: sgbdad23
Posted: Tue Jan 06, 2009 2:59 pm (GMT -7)
Topic Replies: 1

To start, do not assume, ask you client for specifics. The information will tell you haow to allpy the check.
_________________
Out of the dark and into the Black

Accounting and Bookkeeping Questions Forum :: RE: Small Business Income Statement

Author: sgbdad23
Posted: Tue Jan 06, 2009 2:56 pm (GMT -7)
Topic Replies: 2

Those assets need to be depreciated, via a GAAp acceptable method over their life cycle. This is good for assets taht you are going to work throughout their life or trade in on a newer model. If you do not use your depreciation in the proper year you will lose it, though there is a tax form for catch up depreciation.

Your loan payment is not entirely an expense in that only the interest portion of the payment is an expense, the principle portion winds up adding to the owners equty. Always remember that Profit Pays Principle.
_________________
Out of the dark and into the Black

Accounting and Bookkeeping Questions Forum :: Small Business Income Statement

Author: krymer
Subject: Small Business Income Statement
Posted: Tue Jan 06, 2009 12:51 pm (GMT -7)
Topic Replies: 2

Hello,

I am trying to create an income statement for my father's landscaping business, I believe he is incorrectly attributing expenses, etc. Under assets he has items such as a zero turn lawn mower, trimmer, aerator, rakes, shovels, etc but shouldn't he be depreciating there value every year? Under expenses he has usual items like labor, fuel, advertising, but he also has business cards, clothing, office supplies, oil, shouldn't these be in assets? should these things be depreciated as well? He also has loan payments he made toward the zero turn mower he purchased a few years ago, are the payments toward an asset considered an expense? He also has customer material items like Fertilizer, mulch, dirt, ect that he has under expense, however whatever he pays for these materials, he then applies that to his invoices for his customers, so it really doesn't seem like an expense. Thank You.

Work at Home, Work From Home Forum, Home Business Forum :: RE: SCAM ALERT

Author: KKrish
Posted: Tue Jan 06, 2009 11:04 am (GMT -7)
Topic Replies: 2

Thanks for the information!

Work at Home, Work From Home Forum, Home Business Forum :: Anyone using Facebook,Myspace or Twitter to promote

Author: 611Jen
Subject: Anyone using Facebook,Myspace or Twitter to promote
Posted: Tue Jan 06, 2009 8:24 am (GMT -7)
Topic Replies: 0

Anyone using Facebook,Myspace or Twitter to promote your business's ?
_________________
Jennifer
WAH Professional
http://www.jobsbasedfromhome.net/

Accounting and Bookkeeping Questions Forum :: RE: journal entry question

Author: neerajmittal3
Subject: Fund transfer
Posted: Tue Jan 06, 2009 6:45 am (GMT -7)
Topic Replies: 1

Fund transfered from Main fund to smaller fund is not an expense to the main fund. Its only a capital contribution/ corpus contribution.
Also the fund recieved by the smaller fund is not an income and should not be credited to income account. Its either capital contribution or liability (depending weather it has to be repaid back in future or not) and so should be taken to balance sheet.
For any other details you are free to contact me.
Regards
_________________
Neeraj Mittal
Chartered Accountant
255-a Chak Zero road, Allahad, U.P., India
Mob: +91-9415237911
Web : www.neerajmittalca.com

Accounting and Bookkeeping Questions Forum :: RE: Accounting for chargebacks

Author: sharonb
Posted: Mon Jan 05, 2009 5:54 pm (GMT -7)
Topic Replies: 2

Ken wrote:

That sounds correct.

Thanks Ken.

Accounting and Bookkeeping Questions Forum :: RE: Accounting for chargebacks

Author: Ken
Posted: Mon Jan 05, 2009 5:53 pm (GMT -7)
Topic Replies: 2

That sounds correct.

Accounting and Bookkeeping Questions Forum :: RE: A Newbie with a bunch of Gen Questions

Author: Ken
Posted: Mon Jan 05, 2009 5:52 pm (GMT -7)
Topic Replies: 3

That is where Universal Accounting's Professional Bookkeeper Program comes in. www.universalaccounting.com

Accounting and Bookkeeping Questions Forum :: journal entry question

Author: Kerrin
Subject: journal entry question
Posted: Mon Jan 05, 2009 5:30 pm (GMT -7)
Topic Replies: 1

I have just started doing the book work for our small self managed superannuation fund. I have transferred funds from the main trust account to another smaller property trust account so that loan repayments are covered. In the journal entry for the main account should this be called a trust cash distribution and listed under expenses? And same for the smaller account but listed under income? I use Quicken.
Many thanks.

Accounting and Bookkeeping Questions Forum :: Tenant Allowance

Author: sharonb
Subject: Tenant Allowance
Posted: Mon Jan 05, 2009 5:20 pm (GMT -7)
Topic Replies: 1

I have a customer that received a very large check from his landlord called a tenant allowance, I'm assuming for leasehold improvements. I debited the bank account but what account do I credit? It seems to be a reimburseable expense but in QuickBooks I'm not sure how to do that. Thanks.

Accounting and Bookkeeping Questions Forum :: Accounting for chargebacks

Author: sharonb
Subject: Accounting for chargebacks
Posted: Mon Jan 05, 2009 5:17 pm (GMT -7)
Topic Replies: 2

I have a customer who has a large internet business. He receives several chargebacks per month but I'm not sure if I'm accounting for them properly.

I am debiting the Sales Returns account so it will reduce sales and I am crediting the bank account. Is this correct? The business is 100% online and does not have any accounts receivable. Thanks.