Hi people, i’ve looked for an answer to the following but I can’t understand what to do, so i’m hoping someone will give me a simple step by step instruction as to what I have to do please.
I bought a chair a few years back for £500, I have recently sold the chair for £400. How do I enter this on quickfile to account for the sale and depreciation (I am not VAT registered). I’ve e-mailed my accountant but still don’t understand how to record it on Quickfile. Hoping for a simple step by step answer pretty please.
Regards, Drew.
So the original purchase presumably went onto an asset code (fixtures & fittings or office equipment). Once you’ve decided how you want to depreciate it and over how many years, you’d need to make a journal for each year putting that year’s depreciation as a debit on the relevant P&L code for office equipment depreciation, and as a credit on the assets and liabilities depreciation code (I don’t have the exact codes to hand but typically it’s one above the original asset code, so if the asset is a debit on 0020 then the depreciation accumulates as credit on 0021).
When you come to sell you journal:
the full original cost as a credit off the asset code (e.g. 0020)
the total accumulated depreciation as a debit to the matching depreciation code (e.g. 0021)
the difference between the two (the current net book value) as a debit on sale of assets
This gets the asset off your balance sheet. Now for the £400 sale you make a sales invoice for £400, also on the sale of assets code. The result of all this is that “sale of assets” will show a credit (a gain) if you sold the item for more than its NBV or a debit (a loss) if you sold it for less than NBV.
Hi Ian, l thank you very much for trying to help me. Unfortunately the payment was made on card and as the card company only pay me once a week it came through with other payments so I haven’t been able to split it to put it to a different nominal code. I’ve spent hours trying to get my head around this and have now given up due to not seeing how the amount can be split. So, i’m grateful for your help, but I will just highlight it when I send everything to my accountant in April and he will probably be able to sort it a lot easier than me.
If you’re recording all your weekly sales as a single invoice then what you can do is edit the generated invoice, subtract £400 from the existing line, then add a second line for £400 and click the button in the line description box and change just that line to be “sale of assets”.
But more generally, when you take card payments the usual approach is to have a separate “merchant” bank account in QuickFile that represents card payments you have taken from customers but haven’t yet received the money from the card provider. When you make a sale you mark the invoice as paid into the merchant account on the date the customer made the payment (which is what you have to do under HMRC rules if you’re on VAT cash accounting), and when the provider pays out that is a bank transfer from the merchant account to the current account.
button in the line description box and change just that line to be “sale of assets”.