After acquiring and existing company I am trying to build our balance sheet. I entered fix assets into the fixed asset list but they do not show up on the balance sheet. How do I get these to show up on the balance sheet?
The fixed asset list is just a list of items that you can purchase for fixed assets. To put the assets on the balance sheet, do a journal entry and debit the fixed assets and credit the Retained Earnings. Just like you would post the cash that was in the checking account by crediting Retained Earnings. When you are done, all your assets will total the amount in all your liabilities and your Retained Earnings.
When you purchase a new fixed asset, you would pull from the list you built.
CAVEAT:
(Paul 5225, I know this doesn't apply to you, since you are a new business. This is just in case someone else happens to find this thread and has been operating their business for a while.)
If there are assets that are not on your balance sheet and you have been keeping up-to-date with your bookkeeping, which I am assuming that you are, then you do not just want to go and make a general journal entry to the system to "fix" the balance sheet. There is a very good reason why some assets, especially smaller ones, are not on your balance sheet. The reason is that you have already expensed these assets and therefore you are NOT able to depreciate them any longer. If you add assets to the balance sheet which you have already expensed and begin depreciating them now, you will be double-dipping in the eyes of tax authorities.
This is what you need to do. Go through your fixed asset list and determine which assets were purchased with business money and which were purchased with personal money. If they were assets you contributed to the business, you can add them to the balance sheet with the following entry.
Assets xxx
Owner's Contribution xxx
Make sure to consult with your accountant or tax preparer for getting the proper amount of depreciation and accumulated depreciation entered to the system. If you purchased the assets in past years with business money, just leave them in the fixed asset list and do not bring them into the balance sheet. They have already been expensed and therefore are not part of the balance sheet.
Mr. Vande Zande,
Thank you very much for your response. I am trying to help a friend get his Quickbooks organized, but I am a data entry person -- not much of a bookkeeper. The best I can do is get his information into Quickbooks as correctly as possible, then turn it over to a CPA. My friend has several big ticket items (>$5K) that he purchased in full with his personal account before the start of business. These are machines that are necessary for the manufacture of products. My thought is to post just as you have suggested with your response to Paul5225's query. To confirm -- I would create a general ledger enter to debit fixed assets and credit owner's contribution?
I imagine I would treat the opening balance in the bank similarly -- debit the bank account, credit the owner's contribution.
Thank you very much for taking the time to read this.
chrbrwn: You are correct.
