Quickbooks help with General Journal entry...

Hi There,

I have been a quickbooks user for many years and this is the 1st time ive come across this type of transaction and am totally stumped how to correctly enter it...

My Van was written off in an insurance claim total loss...

I claim 100% GST on vehicle expenses..

The agreed value is $14,990.00
less ITC Deduction $1,362.73
less Excess of $450.00
less Rego of $115.60

Final payout was $13,061.67

I have spent way too many hours trying to enter this and have it show up correctly in the BAS with no success... My BAS is now a few days late!!!

Any help on how to enter this would be greatly appreciated...

I have tried Gen Journal entries but cant seem to make them work???

Cheers
watto68

Comments

Graham Boast

Hi Alec

This is a really simple transaction, but the reasons for its simplicity are complex.

The reason for the simplicity is that under GSTR2006/10 (fascinating bedtime reading) there is no GST payable on the settlement. See also the link below for a slightly less cryptic explanation.
https://www.ato.gov.au/Business/Bus/Insurance-and-GST/ , As with all Tax Office publications, they are all but unreadable to anyone who doesn't regularly wear a horse hair wig to work.

This can simply be recorded as a "Make Deposit" to an other income account "Insurance Settlements". There is no GST coding and the transaction doesn't appear on your BAS.

The settlement figures mention GST because in theory, you are going to go out and buy a $14990 vehicle, and when you do, you will be able to claim a GST refund of $1362.73 (an eleventh).

Furthermore, when you get around to cashing in the Rego from your old vehicle, the State Rego office with give you a refund on your unused rego months.

On both the replacement car and the rego refund, the GST comes into play on those transactions, not the payout.

And the excess? you can't claim GST either. It's really just a loss you wear but isn't recorded.

Hope this helps.

Graham Boast
Reckon Accredited Consultant
graham@reckonhelp.com.au
www.reckonhelp.com.au/remotesupport.htm

Alec Watson

G'day Graham,

Thanks for the reply.... it makes a little more sense now... until i started reading GSTR2006/10.... oh boy...

When i make a deposit for the payout figure do i use the original amount of $14,990.00 or the actual amount deposited to account of $13,061.67? In the make deposit window their is nowhere to assign a Tax Code so im assuming it automatically applies a GST code is this correct?

The ITC Deduction of $1362.73 still confuses me are you saying i am not entitled to claim this back even thou i am entitled to claim 100% GST via the BAS and only claim it back as future expenses are paid with the Insurance funds???

If the above is correct does that mean i only need to enter the 1 transaction and its done?

Cheers
watto68