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Business Financials – How to enter Motor Vehicle Purchase in MYOB or other software including trade-in

images/Business Financials2.jpgClient 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?

**Need help? Not sure? Call for FREE 30min advice / strategy session today! Aus +61 407 361 596

and also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!

Search for info you need in the box towards the top right. Call for FREE 30min advice or click for the list for MORE articles.

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Accounting Software Australia, MYOB, Quickbooks, accounts software, bookkeeping software

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Accounting Software Australia, MYOB, Quickbooks, accounts software, bookkeeping software
Accounting Software Australia, MYOB, Quickbooks, accounts software, bookkeeping software
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