User Support Forum

3rd June, 08

Since 2004 upto current year the following amounts have been carried forward:

a) Church Land (a/c 01-1820-000) $ 180,000.00

b) Church Building (a/c 01-1821) $ 446,674.30

In actual fact the amounts for above should have been reversed i.e. the land valued @ $ 446,674.30 and the building valued at $ 180,000.00

c) Parsonage Land (a/c 01-1822) $ 62,000.00

d) Parsonage Building (a/c 01-1823) $ 59,453.05

e) Rental House - Land (a/c 01-1825) $ 131,900.00

f) Rental House - Building (a/c 01-1824) $ 8,100.00

Please advise step by step entries that I need to process in order to update the values of the Land & Building based on the present market conditions.

How does the Accumulated Amortization works? Is it by standard formula in corporated into the system?

Thanks and regards

Osvaldo De Souza

Input the following entry to correct the land and building values:

Debit Church Land 01-1820 $266,674.30
Credit Church Building 01-1821 $266,674.30

The accumulated amortization (a/k/a accumulated depreciation) works by estimated the useful life of the building, estimating the residual value of the building at the end of it's useful life, and then using these values along with the acquisition cost to compute the amount of amortization each month. The easiest amortization method is straight line depreciation.

For example, let's say the useful life of the rental house building is 20 years. At the end of 20 years you estimate the residual value will be $2,100. The acquisition cost is $8,100. So the monthly amortization would be $25 (20 years x 12 = 240 months. $8,100 - $2,100 residual value = $6,000. $6,000 divided by 240 months = $25/month)

You would then need to post the following entry into Fund Accounting each month to record the amortization:

Debit Depreciation Expense - $25
Credit Accumulated Depreciation - Rental House Bldg - $25

Since the entry would be the same each month I'd set up a repeating entry in Fund Accounting for this.