Company Vehicle purchases

Posted By JaniceH over 6 years ago

Hi All

I'm wondering if someone can assist in the best way to record the purchase of company vehicles for a painting company in BC.

-This is a sole proprietorship, they buy and sell their vehicles every couple of months, these vehicles are always used and under $5,000.00. Would I just record as Vehicle expense and not worry about CCA and the depreciation because they change so often?

-I have just started entering this company into Sage 50 as of January 2017, they had three vehicles at the start of 2017. How do I enter these into the books for the record.

-they've already sold two and have purchased another used vehicle.

Thanks

Jan

Parents

0 phughes over 6 years ago

As a general rule I would put anything over about $500 into an asset account and save copies of the documentation for year end. If the vehicles are not held long enough to depreciate then you could use an expense account such as Gain/Loss on Disposal of Assets so if a vehicle is purchased at 5,000 you would enter that amount as a debit to asset account. If the vehicle is sold for 4500 3 months later, you would credit the entire $5000 back to the asset and record a $500 debit to gain/loss on disposal.
Cancel
Vote Up 0 Vote Down

Sign in to reply

Verify Answer

Cancel

Reply

0 phughes over 6 years ago

As a general rule I would put anything over about $500 into an asset account and save copies of the documentation for year end. If the vehicles are not held long enough to depreciate then you could use an expense account such as Gain/Loss on Disposal of Assets so if a vehicle is purchased at 5,000 you would enter that amount as a debit to asset account. If the vehicle is sold for 4500 3 months later, you would credit the entire $5000 back to the asset and record a $500 debit to gain/loss on disposal.
Cancel
Vote Up 0 Vote Down

Sign in to reply

Verify Answer

Cancel

Children

0 JaniceH over 6 years ago in reply to phughes

Ok thanks for your reply, these were my thoughts also

Jan
Cancel
Vote Up 0 Vote Down

Sign in to reply

Verify Answer

Cancel
0 JaniceH over 6 years ago in reply to phughes

I have one more question, they sold one of their vehicles in February 2017 for $4,400.00, but I just started doing the bookkeeping for them, they are not sure how much they paid for this vehicle in 2016, how do I record this transaction?

This was a used Vehicle when purchased.

Thanks
Jan
Cancel
Vote Up 0 Vote Down

Sign in to reply

Verify Answer

Cancel
0 phughes over 6 years ago in reply to JaniceH

See if you can find the original journal entry for the purchase or any documentation. If the client does not have anything on hand check with the accountant and they might have information as they generally have schedules of assets.
Cancel
Vote Up 0 Vote Down

Sign in to reply

Verify Answer

Cancel
0 JaniceH over 6 years ago in reply to phughes

Yes I will do that.
Thanks again for all your help!

Janice
Cancel
Vote Up 0 Vote Down

Sign in to reply

Verify Answer

Cancel

Sage 50 Canada

Company Vehicle purchases

COMMUNITY

COMPANY

PARTNERS

SUPPORT & TRAINING