Capital Purchases and Finance in AccountRight

[Suja_P]

Welcome to the MYOB Community Forum, @Sam987. I hope you find this to be a useful resource for all MYOB related queries.

Thank you for your post. I have moved it to this article by Ron (@ronatbas), as you may find the information in this article to be of help to you. Furthermore Ron may also be able to assist you with your specific transaction.

Kind regards,

Suja Pillai
Social Support Manager
MYOB Australia Pty Ltd

[ronatbas]

@Sam987

Notionally you will have the following accounts already set up

1 xxxx Motor Vehicles at Cost

1 xxx5 Depreciation on MV

2 xxxx Directors loan account as Credit Card type account

You will need the following

2 xxxx Finance Co loan -set up as Credit Card type

2 xxx5 Unexpired Interest on Finance Co Loan

The bill should be set up with the account being1 xxxx MV at cost and code CAP to pick up the GST.

The smaller payments can be made from bank and director's loan account and the major payment from the 2 xxxx Finance Co Loan. These payments are detailed in the original blog.

[Sally_k]

Hi @ronatabs

your article is amazing and save my life :-) I am doing hire purchase for construction company My boss bought CNC machine  on hire purchase and your example help me very well . I want to know when you enter the purchase and use the tax code  N-T but in above lines it was CAP

1-2910               CNC Bridgeport Mill                            CAP

1-2950               CNC Mill Accum. Depreciation           N-T

kindly explain me which code should I use for Purchase ?

Another question is I  just create the depreciation account as you suggest but I don't know how their accountant do the deprecation . Is it alright if I didn't touch the depreciation and at the end accountant handle as he want to do it. Because I am doing their backlog and as well as working for current financial year but I have not any idea about depreciation.

Also if you can explain me how 2-2105  Unexpired Interest on ABC Loan    account will reconcile at the end?

Warm Regards

Sally 

[Sally_k]

Hi @ronatbas

One more question  . My boss hand over few more hire purchase documents and he bought two machines in 5 June 2014 and another 10 Oct 2014 . As I am doing back log and my boss wants me  to enter the transaction from July 2015 . I am thinking to calculate the pending amount on 1 July 2015 and start entering the transactions by following above method. Kindly advise me is it the right method to do it ?

Warm Regards

Sally

[ronatbas]

@Sally_k

I don't think any accountant expects the bookkeeper to adjust depreciation. They should have their schedules using one or other of the accepted depreciation methods and it is not up to you to second guess their preferred method. What I would be doing is scan all of the Capital equipment invoices and sending them to the accountant so that when they eventually get the file they can determine the depreciation they are able to claim. They should also advise you on the timing of the entry dates for the machines mentioned in your second note. It is all going to depend on when they last reported.

Going back to the purchase query - you will the 1-2910               CNC Bridgeport Mill                            CAP.

On your chart there may not be specific Item and all of the mills may be gathered up under 1 xxxx Machinery at Cost.

MYOB will puts a message about using this account ... press OK

[Telperien]

Hello Ronatbas,

Thanks so much for your assistance with my recent query, I have worked my way through most of the steps (very slowly...).

I have a couple of (probably rather dumb) questions still outstanding:

1. The car we have purchased has a balloon; I have set up the loan account, the unexpired interest account, and the balloon account. In your directions, you have said to pay for the car from the loan account, which I have done. You also then say to "Using Spend Money, the balloon is paid to the 2-xx10 account." I assume this is at the end , when the balloon is the final payment paid ?  

2. We put down a deposit of $3000, which was subsequently refunded to us by the dealership. I am not clear about how to record this in and out ?

Thank you again for your help !  And best wishes for the New Year!

[ronatbas]

@Telperien

You should move the money from the loan account to the balloon account as at the date of the loan so that loan account is representative of the amount still payable on the loan.It will not be exactly the amount payable as your accountant should do the adjustment to the interest when he finalises the accounts at year end.

The deposit paid, then refunded should be paid back to account that it came from. Either your trading account/Credit card or personal funds. Personal funds are generally represented on the chart of accounts as Directors Loan or Directors current account.

Ron

[Telperien]

Thanks , Ron. Much appreciated. I think I am on top of it now (temporarily,at least!)

Telperien

[CarlyHutchings]

Hi, I have followed the instructions for the purchase of a motor vehicle.  When I put through the monthly repayment, including a payment of interest, the amount of interest increases.  I would expect that this should decrease as the loan is paid off.  Can you please help with this.

[ronatbas]

The monthly payment should be bank to loan for the total payable. To pick up interest payment you need to do another spend money Loan Account to Unexpired Interest. This can be done periodically and is often left to end of year.

Ron B