How do I make an entry (ledger?) that shows all my inventory (“Items”) are sold to one buyer? This is an end of business transaction. Qbooks Pro 2009

If you have found the information on my blog to be useful, please consider donating a few bucks today; click Donate icon button. Thank you!





If you have found the information on my blog to be useful, please consider donating a few bucks today; click Donate icon button. Thank you!





Question:

I have sold all inventory (QB “Items”) plus my tools and fixtures.  How do I make entries to cover the sale of all inventory items (bring them ALL to ZERO on hand)?  Can I make a ledger entyr that will do that.  Basically I have sold all inventory, tools and fitures to one party in one transaction for resale in their shop.  I can/will divide the “Items” sold from tools and fixtures.

Answer:

I would suggest consulting with your Accountant or Tax Advisor since the transactions may have various tax implications depending upon legal entity, liability exposures and nature of the sale of assets during closing down of the business.

 

Normally, this will involve several entries to record transactions.

 

Let’s say in this example, The-Whole-Shooting-Match was sold for $50,000 and the payment was deposited to the company bank account. This is what it shows as assets on the books per QuickBooks.

  • Inventory Assets Balance $35,000

 

  • Tools and Fixtures:

 

Purchase Price = $28,000

Less: Accumulated Depreciation = <$14,000>

Tools and Fixtures, Net = $14,000

  • Total Assets = $49,000 (35000+14000)

 

Net gain on sale of assets (the-whole-shooting-match) = $1,000

 

Entry # 1

Create one new account

Gain on Sale of Assets > Other Income Type (on Chart of Accounts)

It is to record all the effected transactions in one place so that Accountant or Tax Advisor can take it over from there.

Note: If Loss on Sale of Assets > Other Expense Type (on Chart of Accounts)

Entry # 2

This is to record $50,000 check from the sale of assets deposited to the company bank account

  • Banking > Make Deposits
  • Received From = person or company who wrote the check
  • From Account = Gain on Sale of Assets
  • Amount = $50,000

Entry # 3

This is to remove inventory from the Balance Sheet to zero.

GO to Vendors > Inventory Activities > select Adjust/Quantity Value on Hand

·        Adjustment Type = Quantity and Total Value

·        Adjustment Account = Gain on Sale of Assets

·        Click Find and Selected Items button

·        New screen will pop out

·        Click Select All button

·        Add Selected Items button

·        Change New Quantity to Zero (notice New Value also changed to 0.00)

·        Change all the items to zero

·        Notice Total Value of Adjustment – $35,000

·        SAVE & Close

Entry # 4

Write Journal Entry to remove Tools and Fixtures assets from the books

  • GO to Company > select Make General Journal Entries
  • Tools and Fixtures > Credit > $28,000
  • Accumulated Depreciation > Debit > $14,000
  • Gain on Sale Assets > Debit > $14,000

Once all entries are posted, P&L should show $1,000 as Gain on Sale of Assets under Other Income category.

 

Once again, I would suggest consulting with your Accountant or Tax Advisor for the best possible answers for you.