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Business Financials – How to enter Motor Vehicle Purchase in MYOB or other software including trade-in
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Published on Sunday, 15 January 2017 21:18
Client emailed –
How am I to enter a Motor Vehicle Purchase in our software as well as including the trade-in?
Our Companybought 2 cars –
- Holden Cruze for $16,700.00 includes GST/stamp duty/transfer fee
- Barina for $12,888.00
We traded in the company car – Holden Commodore for $3000 and
the wife’s car for $1500. Daniel has not claimed the $1500 but gave it to the business.
Now both ’new’ cars belong to the company.
Invoice for Holden Cruze is $16,700.00
The $4,500 trade in was netted out of the purchase of the Barina so the invoice is
($12,888- $4,500) $8,388.00 net.
We have in our accounts:-
MV @ cost 18539.37
MV Accum Depn 15412.00
Please advise. Thank you. JH
How to Enter –
To keep things simple, to enter a Motor Vehicle Purchase in MYOB or other software as well as including the trade-in, we need to set up some New Accounts (NA) for each motor vehicle (MV) and new accounts for the loans on each car - it is then easiest to leave the final reconciliation and adjustments to your accountant year end.
I assume the 2 MV accounts are only for the 2 Commodores and no other cars. It is good practice to create new accounts for EACH vehicle so the accountant can reconcile at year end with ease!
Separate the Rego (and Insur if included in the deal) from the $16,700 (or you can leave for the accountant at year end to pick up)
NA Asset MV Accum Depn Cruze (to be used at year end) – create in the Accounts List
Start a new General Journal with Purchase ticked at the top, and tick Includes GST.
Then enter as follows – (create New Accounts (NA) as you go)
NA Asset MVehicle @ Cost Cruze Dr 16,700 less rego, insur CAP (tax code)
NA Liability MVeh Loan Fin Co Name* Cr 16,700 less N-t
Expen Rego Dr $rego split for odd GST, 2 lines**
Expen Insur (if included) Dr $insur split for odd GST, 2 lines**
Liab MVeh Loan Fin Co Name Dr 4,5000 N-t
Liab Daniel Loan Account Cr 1,500 N-t
Asset MVehicle @ Cost Commodore Cr 3,000 N-t
*Is the Loan a Chattel Mortgage? – Can mention the type of loan in account name as well
Monthly payments – for simplicity, allocate from bank to NA Liability MVeh Loan Fin Co Name (the new finance account).
The old car accounts – Asset MVehicle @ Cost Commodore, and the MV Accum Depn can be left for the accountant to calculate and adjust at year end, in case there are other adjustments he needs to do.
For other examples of entering MV assets in the accounts, see -
Quickbooks – How to go about setting Chattel Mortgage up and accounting for the monthly payments in Quickbooks.
Another Asset Example – How to enter assets in the books
How do I show liabilities for the total borrowed including interest, not just the principle/asset amount?
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