User Support Forum

Company A did some construction work for our church - total bill was $6000.00
We paid half up front - $3000.
After the work was done - they wanted payment of $2800 with the remaining $200 applied as a donation to the church.
The construction work is to be paid out of our 02 Fund.(with the first installment there is no problem)
The second installment...I am hazy.
Would the following be correct???
02-checking........................................$2800 Credit
02-construction fund acct........$2800 Debit
01-checking..........................................$200 Credit
01-Operating Fund Balance......$200 Debit
Thanks for your help in advance.

GFBCUser wrote:Company A did some construction work for our church - total bill was $6000.00
We paid half up front - $3000.
After the work was done - they wanted payment of $2800 with the remaining $200 applied as a donation to the church.
The construction work is to be paid out of our 02 Fund.(with the first installment there is no problem)
The second installment...I am hazy.
Would the following be correct???
02-checking........................................$2800 Credit
02-construction fund acct........$2800 Debit
01-checking..........................................$200 Credit
01-Operating Fund Balance......$200 Debit
Thanks for your help in advance.

Um ... I wouldn't move anything, other than pay the $2,800 bill.

I'd give the construction company a letter thanking them for the $200.00 donation which will be used in your buidling/construction fund in future.

Frankly, what you show there for the second set of entries is debit the Unrestricted Net Assets twice. You're Crediting the checking, which is normal for an expense as you're paying out funds, but in this case you would want to show some type of increase. Then in the next line, you're debiting the unrestricted net assets (fund balance) which reduces net assets. Its not correct.

In reality, this is a donation in kind, and should not touch any of the actual funds. Some recommend creating an account to reflect these types of donations, but unless this happens on a regular basis (monthly??) its more trouble than its worth. I suggest using the letter to thank the company.

However, if you REALLY need to reflect the $200.00 donation by moving funds from the construction fund, all you need to do is this:

02-1110-000 Checking CR 200.00
02-9110-000 Transfer Out DB 200.00
01-9120-000 Transfer in CR 200.00
01-1110-000 Checking DB 200.00

this is covered on page 235 of the V12 manual, if you're still using v11.5, its on page 229.

Thanks...will go with the letter!!!