Plant & Machinary Purchase with personal funds
Hi there.....we have purchased some plant and machinary for our business using our own funds. What is the best way to imput this into MYOB?
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More of a question for your accountant than for the accountancy program.
Depends on how you want to handle it for taxation purposes (yours and the company's) and what the equipment is.
a) You could loan the funds to the company (at zero interest), the company then purchases the equipment and repays you the loan funds out of (after tax) profit at some later date. The company has paid tax on profits, you pay no personal tax on monies returned to you from the loan. Set up a Liability for the money it cost you to buy the equipment (essentially creating a "loan" account) and an Asset for the value of the equipment. Pay down the Liability account with after tax profits, depreciate the Asset (depending on the value and type of asset).
b) You could loan the funds to the company at an agreed interest rate, the company pays back the loan + interest - interest is an expense item for the company, while the premium is repaid out of profits. You pay tax on the interest you receive, but not the capital returned. Same structure as above, but with an "interest" account to manage the interest repayment as an expense.
c) You could make it part of "shareholder's equity" in the business (there should be an existing account code) - to be recouped in a similar manner to (a) if you ever decide to do so.
