How do I enter stock and equipment from a competitor who is closing down.

Hello experts....We have just purchased stock and equipment from a competitor who has closed down. Could some please tell me how to enter the stock? We paid a lump sum so I am not sure if I enter the stock at the estimated reduced price, which will then change the averages of the stock we have paid full price for from suppliers OR is it better to create a whole new part number for each of those stock items. Hope that makes sense?

Comments

Bruce

If this was me I would be talking to my accountant as to how these items should be valued (and hence recorded). Rationale being that there could be taxation implications - particular the equipment which will presumably attract depeciation

Gillian_9673196

Thanks Bruce, I do understand those implications but not sure how reckon will be implicated etc.

Bruce

I would record the equipment as "plant & equipment:cost" or similar. If you run your depreciation from a spreadsheet then this can just be a bulk entry.

I'll let somebody else advise in relation to the stock issues - I only have limited experience with stock, valuing COGS etc.

Acctd4

Hi Gillian

Trading Stock doesn’t attract depreciation so you can enter this as you normally would for any other stock purchase.

The 30K instant asset write-off threshold for depreciation was increased (for eligible small businesses – check your specific business’s eligibility) to 150K for purchases made from 12/03/20 so if your business is eligible & the net equipment cost was below that, the equipment amount can be expensed (claimed) in full.

If it was over 150K, I would enter it as CAG/CAF to an Asset account for depreciation pooling at EOFY. Which Asset account you use for this depends on your Chart of Accounts setup - if you have an SBE Pool Asset account, allocate it to there a specific P&E Asset - or “Cost” subaccount – is fine.

Don’t forget to include a detailed description on the transaction(s) for your tax agent at EOFY.

Shaz Hughes Dip(Fin) ACQ NSW, MICB

Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

Accounted 4 Bookkeeping Services

Ballajura, WA

0422 886 003

shazinoz2@bigpond.com

www.accounted4bs.com