Selling church equipment

[Blessed]

Hi! I'm using Powerchurch 11.55. The church is planning to sell the riding lawnmower. A member of the church is interested in buying it. Should I use the Accounts Receivable module or just enter it as a transaction in Fund Accounting; by Crediting checking acct and Debiting Equipment Asset account? I've looked at previous posts and I'm not sure which would be best. I don't use the AR module for anything else. However, I would like to print a receipt when it is sold. Suggestions would be appreciated. Thanks

[NeilZ]

Hi! I'm using Powerchurch 11.55. The church is planning to sell the riding lawnmower. A member of the church is interested in buying it. Should I use the Accounts Receivable module or just enter it as a transaction in Fund Accounting; by Crediting checking acct and Debiting Equipment Asset account? I've looked at previous posts and I'm not sure which would be best. I don't use the AR module for anything else. However, I would like to print a receipt when it is sold. Suggestions would be appreciated. Thanks

Well, you just can't credit the checking account, because if you wanted to add funds that is a debit transaction.

Here is a post by Jeff that lists what needs to be done when selling an asset. If you didn't take any depreciation on the you will need to figure that out.

To record the sale of an asset with depreciation you need to know the original price, the total depreciation and the sales price. You need to record the amount of cash you received, remove the original price of the asset and associated depreciation. Any difference will be a gain or loss on the sale.

For example:
Original price: 8,000
Accumulated Depreciation: 6,000
Sales Price: 4,000

The accounting entry would look like this:

Code: Select all

                                DEBIT   CREDIT
    Cash                        4,000
    Van Asset                           8,000
    Accumulated Depreciation    6,000
    Gain on Sale (income acct)          2,000

You'll just need to figure the depreciation, then show the income in an income account. If you just want to show the whole thing as wiping out the asset and not showing any income, eliminate the depreciation and gain(income) accounts.

As far as a receipt, I suggest just using a 'Bill of Sale' and then once signed over, making a copy for you records. You can probably find a 'Bill of Sale' template for MS Word using a web search.

[Blessed]

Hi again. The sell of the lawn mower took place, but the payment was in 2 parts. Two different months. When I received the money I debited the checking account and credited the unrestricted income account both times. The purchase price was $1500. It was sold for $350. I don't want to use depreciation, I just want to wipe it out. So should my entry look like this? Unrestricted income account debit $350.00 Equipment Asset account credit $350.00?

[Blessed]

On the same note: we had a loss due to a pipe that burst in the church kitchen. The damage was assessed at $2200. We had a deductible of $1000. The check is for $1200. How would I show this in Powerchurch and as it relates to the Asset account?

[NeilZ]

Hi again. The sell of the lawn mower took place, but the payment was in 2 parts. Two different months. When I received the money I debited the checking account and credited the unrestricted income account both times. The purchase price was $1500. It was sold for $350. I don't want to use depreciation, I just want to wipe it out. So should my entry look like this? Unrestricted income account debit $350.00 Equipment Asset account credit $350.00?

Well .. if you were showing the asset at 1500, and you received 350, you have 1150 you have to account for to wipe out the asset. How are you going to cover that?

[Blessed]

"If you just want to show the whole thing as wiping out the asset and not showing any income, eliminate the depreciation and gain(income) accounts." I have apparently misunderstood the above instructions. I do have an equipment asset account but I don't have any itemized equipment listed for it. Do I need to do the inventory module before I can proceed to show the sale? Purchases have been added to the asset account over the years if totaling $500 or more, but a list was never created.

[NeilZ]

"If you just want to show the whole thing as wiping out the asset and not showing any income, eliminate the depreciation and gain(income) accounts." I have apparently misunderstood the above instructions. I do have an equipment asset account but I don't have any itemized equipment listed for it. Do I need to do the inventory module before I can proceed to show the sale? Purchases have been added to the asset account over the years if totaling $500 or more, but a list was never created.

You're referring to my first answer, where I didn't have much information. As I mentioned in my second answer you have to account for the depreciation between the purchase price of 1500 and the sale price of 350.

You then said:

I don't want to use depreciation, I just want to wipe it out. So should my entry look like this? Unrestricted income account debit $350.00 Equipment Asset account credit $350.00?

To which I replied : Well .. if you were showing the asset at 1500, and you received 350, you have 1150 you have to account for to wipe out the asset. How are you going to cover that?

You have to use depreciation, otherwise you still have 1150 in your asset account. If you do not process this correctly, you're showing more assets than you have, and you're giving the congregation an incorrect picture of the finances.

You do not need to use the equipment inventory, it does not connect to Funds Accounting in any way.