Specific Quickbooks Question

Discussion in 'Business Operations' started by ksland, Dec 4, 2004.

  1. ksland

    ksland LawnSite Senior Member
    Posts: 927

    More an accounting question I guess...here goes... When starting a business, taking owners cash to buy vehicles and equipment, how do I set up an account to justify this money. For example.... owner takes $5000 of his personal money to buy a Truck. The truck will be a fixed asset which will be depreciated over 4 years. I know how to set up the fixed asset account for the truck with sub accounts for the depreciation. I just need to know where I pull the money from under an account in Quickbooks. Also is it possible to return the money later when the business supports it, under say an owner's draw. Please help! :cry:
  2. o-so-n-so

    o-so-n-so LawnSite Bronze Member
    from Alabama
    Posts: 1,218

    Thats a good question that I can't answer.

    I think you could work around the problem though.

    What if? You take your money of $5000.00 and put it in 5 $1000.00 short term CD's making 4% interest. Then barrow the $5000.00 against the CD's at 5% (or 1% over CD's) for the purchase of the equipment.

    You still have your 5K, you have the equipment paying 1% money and you show it as a equipment purchase in QB.

    Don't know your situation though........................ :confused:
  3. fastpitcher

    fastpitcher LawnSite Member
    from PA
    Posts: 91

    look in the chart of accounts. there should be one for owner capital with two sub accounts. one for owner draws and one for owner investment.
  4. dishboy

    dishboy LawnSite Platinum Member
    from zone 6
    Posts: 4,234

    Since it's only on paper anyway, or computer file you just make a deposit to Petty cash and and then pay for it out of that account. As far as how not to list that deposit as income I am not sure??

    On a side note I would look at IRS rules, I think you can deduct the whole truck the first year under section 179 [at the 5000 dollars anyway]or there used to be a allowance for start up cost of a new business that allowed you greater deductions but only in your first year. You might want to spread out the deduction if your income is low the first year though.
  5. MacLawnCo

    MacLawnCo LawnSite Bronze Member
    Posts: 1,847

    the other option aside from fastpitcher's response would be an account called contributed capital.
  6. kootoomootoo

    kootoomootoo LawnSite Platinum Member
    Posts: 4,369

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