Fixed Assets versus Office Expense

[Mark D. Lincoln]

All,

I am building a new computer from individual parts (case, power supply,
motherboard, processor, hard drive, dvd-rom, dvd-rw, floppy drive, video
card, processor cooler, etc.) and am wondering how to post these items in
QuickBooks. Typically, if I purchase a complete computer from a vendor like
Dell, it becomes a fixed asset of the company and I depreciate the expense.
For a computer constructed from individual parts, are the individual parts
fixed assets that should be depreciated, or are they office expenses? In
addition, if I declare them as fixed assets, I have to pay a tangible
property tax to the county where my business is located. Finally, is there
someplace I can find the rules on fixed assets versus expenses that will
help me make this decision in the future? Thanks...

Mark

[none]

You should add up the cost of all the parts you buy, the sum is the
total spent or the cost of the computer. You set it up then just like
you purchased a whole unit from a vendor. Then you can depreciate it.

The IRS has all kinds of booklets on fixed assets and how they want to
see them listed, life spans, etc. Your tax preparer may have
information as well or your CPA.


Mark D. Lincoln wrote: All, I am building a new computer from individual parts (case, power supply, motherboard, processor, hard drive, dvd-rom, dvd-rw, floppy drive, video card, processor cooler, etc.) and am wondering how to post these items in QuickBooks. Typically, if I purchase a complete computer from a vendor like Dell, it becomes a fixed asset of the company and I depreciate the expense. For a computer constructed from individual parts, are the individual parts fixed assets that should be depreciated, or are they office expenses? In addition, if I declare them as fixed assets, I have to pay a tangible property tax to the county where my business is located. Finally, is there someplace I can find the rules on fixed assets versus expenses that will help me make this decision in the future? Thanks... Mark

[Mark D. Lincoln]

All,

Well, I received a reply from my accountant which is as follows:

"...it would end up as a fixed asset... I would accumulate all of the part
costs in a temporary account and then transfer the total to the fixed asset
account..."

So, based on this recommendation, can someone please explain how I might do
this in QuickBooks 2004. My accountant does not use QuickBooks, so she is
unable to help me.

Thanks...

Mark

[none]

You could create an account called suspense, accrue the costs into it,
then with a journal entry move the final total cost to fixed assets.



Mark D. Lincoln wrote: All, Well, I received a reply from my accountant which is as follows: "...it would end up as a fixed asset... I would accumulate all of the part costs in a temporary account and then transfer the total to the fixed asset account..." So, based on this recommendation, can someone please explain how I might do this in QuickBooks 2004. My accountant does not use QuickBooks, so she is unable to help me. Thank

[_]

It's fairly common practice to use a Current Asset account called
something like "work in process".


"none" <""root\"@(none)"> wrote in message
news:2O-dnY9Xe9E5Nt_eRVn-ig@trueband.net... You could create an account called suspense, accrue the costs into
it, then with a journal entry move the final total cost to fixed assets. Mark D. Lincoln wrote: All, Well, I received a reply from my accountant which is as follows: "...it would end up as a fixed asset... I would accumulate all of
the part costs in a temporary account and then transfer the total to the
fixed asset account..." So, based on this recommendation, can someone please explain how I
might do this in QuickBooks 2004. My accountant does not use QuickBooks,
so she is unable to help me. Thank

[Mark D. Lincoln]

What type of account is the "suspense" account? Can you give me the steps
in QuickBooks to do this?

Mark

"none" <""root\"@(none)"> wrote in message
news:2O-dnY9Xe9E5Nt_eRVn-ig@trueband.net... You could create an account called suspense, accrue the costs into it, then with a journal entry move the final total cost to fixed assets. Mark D. Lincoln wrote: All, Well, I received a reply from my accountant which is as follows: "...it would end up as a fixed asset... I would accumulate all of the part costs in a temporary account and then transfer the total to the fixed asset account..." So, based on this recommendation, can someone please explain how I might do this in QuickBooks 2004. My accountant does not use QuickBooks, so she is unable to help me. Thank

[HeyBub]

Mark D. Lincoln wrote: What type of account is the "suspense" account? Can you give me the steps in QuickBooks to do this?

PART I.
Create an account. Call it "Suspense" (or "Parsnip" or "Huffalump." Doesn't
matter.)
Buy a part: Credit "Checking" Debit "Suspense"
Buy another part. Do the same.
....
Finally, Credit "Suspense" for the total in the account and Debit the
appropriate asset account.

A "Suspense" account is a temporary holding area used to make double-entry
accounting work.

PART II.
You have other problems, though. I suggest:

1. Take a community college or Learning Annex course on Quick Books AND
basic bookkeeping.
2. Find an accountant who DOES use QB. These accountants have a
sooper-dooper program that analyzes a QB backup file to produce all your tax
forms and end-of-year entries.
3. Better than an accountant who uses QB, much better, is a tax attorney who
uses QB.

PART III.
For a computer, I wouldn't fool with depreciation. I'd expense the whole
thing.

[Allan Martin]

"Mark D. Lincoln" <mdlincoln@speakeasy.net> wrote in message
news:uM2dnUUgzIbaIt_eRVn-2g@speakeasy.net... What type of account is the "suspense" account? Can you give me the steps in QuickBooks to do this?


I would not label the account Suspense, perhaps a Fixed Asset account called
Build in Progress would be more appropriate.

Also your accountant does not have to know Quickbooks to advise you to make
a journal entry or what accounts to set up. Her answer would be the same no
matter what program you used.



Mark "none" <""root\"@(none)"> wrote in message news:2O-dnY9Xe9E5Nt_eRVn-ig@trueband.net... You could create an account called suspense, accrue the costs into it, then with a journal entry move the final total cost to fixed assets. Mark D. Lincoln wrote: All, Well, I received a reply from my accountant which is as follows: "...it would end up as a fixed asset... I would accumulate all of the part costs in a temporary account and then transfer the total to the fixed asset account..." So, based on this recommendation, can someone please explain how I might do this in QuickBooks 2004. My accountant does not use QuickBooks, so she is unable to help me. Thank

[Golden California Girls]

"Mark D. Lincoln" wrote:
What type of account is the "suspense" account? Can you give me the steps in QuickBooks to do this? Mark

Open chart of accounts, pick new account. Name, you'll think of something
better than suspense. Type of account, it really is an asset account, but if
you make it a bank account you'll find it more flexible in the long run.
Eventually you'll find another use for this account such as a customer who is
also a vendor and you just offset their bill and your invoice - barter
exchange.

The other way to do this, is go back to the original purchases of the parts
that make up the computer and code them directly into the fixed asset
account. I'm assuming you bought all the parts in a short period of time, if
something was bought in last year, you have a different problem, ask your CPA.


"none" <""root\"@(none)"> wrote in message news:2O-dnY9Xe9E5Nt_eRVn-ig@trueband.net... You could create an account called suspense, accrue the costs into it, then with a journal entry move the final total cost to fixed assets. Mark D. Lincoln wrote: All, Well, I received a reply from my accountant which is as follows: "...it would end up as a fixed asset... I would accumulate all of the part costs in a temporary account and then transfer the total to the fixed asset account..." So, based on this recommendation, can someone please explain how I might do this in QuickBooks 2004. My accountant does not use QuickBooks, so she is unable to help me. Thank

[Steph]

Yes, that's what I would do, and twice per year, June 30 and Dec 31.


--
Stephanie Wells, AICIA
Partner, Durham Business Outsource
Accounting & Technology
www.dbo.ca
smwells <at> dbo <dot> ca


"none" <""root\"@(none)"> wrote in message
news:2O-dnY9Xe9E5Nt_eRVn-ig@trueband.net... You could create an account called suspense, accrue the costs into it, then with a journal entry move the final total cost to fixed assets. Mark D. Lincoln wrote: All, Well, I received a reply from my accountant which is as follows: "...it would end up as a fixed asset... I would accumulate all of the part costs in a temporary account and then transfer the total to the fixed asset account..." So, based on this recommendation, can someone please explain how I might do this in QuickBooks 2004. My accountant does not use QuickBooks, so she is unable to help me. Thank