Comments for Real Life Accounting Blog

Comment on Internal Control: A Preventive Mainentance Program by John

John — Thu, 11 Mar 2010 18:34:51 +0000

Borislav: I’m not familiar with your question. Please keep in mind that this website is to help answer accounting questions related to small business. Your question requires knowledge of a more advanced level of accounting. You might try to pose your question at http://www.accountingcoach.com.

Comment on Internal Control: A Preventive Mainentance Program by Boki

Boki — Wed, 10 Mar 2010 23:37:57 +0000

How can we determine the completeness of total turnover? How so-called beta-formula work?

Comment on Lease or Buy: How the accounting works by John

John — Mon, 08 Mar 2010 02:03:07 +0000

Innova: I’m sorry, but the primary purpose of this blog is for people to ask accounting questions related to small business. I’m willing to give my time to respond to only those kind of needs.

Comment on Lease or Buy: How the accounting works by innova

innova — Sun, 07 Mar 2010 12:50:47 +0000

I have described the difference between the experience and professional in my above blog. I need your comments please

Comment on Recording Goodwill on the books by John

John — Sun, 21 Feb 2010 17:07:53 +0000

Debbie: Maybe all they asking is for you to journalize goodwill by debiting goodwill under Other Assets and crediting Cash (or however they bought the goodwill).

John

Comment on Recording Goodwill on the books by Debbie

Debbie — Sun, 21 Feb 2010 04:23:21 +0000

I’m taking AccountingII online and here is one our questions. I think it’s a trick question.
It describes the acquisition of timber rights and intangible assets during the current year ended December 31:
a. Timber rights on a tract of land were purchased for $648,000 on July 5. The stand of timber is estimated at 3,600,000 board feet. During the current year, 1,200,000 bft of timer were cut and sold.
I got that part done and calculated. Here’s the trick.
b. Goodwill in the amount of $27,000,000 was purchased on January 7.
It wants us to journalize these entries. Our book specifically states that “goodwill is not amortized.”
If the problem doesn’t state anything else, how do we journalize this?
I know I probably won’t receive an answer in time for this assignment, but it’s still bugging me.
Thanks for any help or insight you can provide.
Deb

Comment on The General Journal – Your Most Versatile Accounting Tool by John

John — Tue, 19 Jan 2010 22:08:24 +0000

Sandi: I’m trying to understand the nature of your question. Retained earnings in an S-Corp is really called a “triple -A” account. But for simplicity sake let’s clarify that the retained earnings account is essentially an accumulation of all the previous profit, losses, contributions, and distributions of the corporation. When you say, “move money out of retained earnings” what do you mean? Do you mean writing a general journal entry that decreases retained earnings and move the amount into another account? What would be this “owners separate account” called, and what would be its purpose? Perhaps you are thinking that in the case that there is more than one stockholder you would need to keep track of each stockholder’s equity separately on the balance sheet? Your tax preparer should be keeping track of each stockholder’s basis when the tax return is completed each year. This is done for a single stockholder also. Tracking basis is done off balance sheet.

Let me know if I didn’t quite get what you were asking.

John

Comment on The General Journal – Your Most Versatile Accounting Tool by Sandi

Sandi — Tue, 19 Jan 2010 15:47:53 +0000

In an S corp with single owner should I move money out of retained earnings of business into an owners separate account at end of year? Or doesn’t it matter being only single owner.

Comment on Internal Control: A Preventive Mainentance Program by John

John — Thu, 14 Jan 2010 22:22:03 +0000

Jim: Interesting approach with the cash lockbox. Thanks

John

Comment on Internal Control: A Preventive Mainentance Program by Jim Adkinson, CPA

Jim Adkinson, CPA — Thu, 14 Jan 2010 21:46:40 +0000

Better yet, have customer remittances go straight to a bank lockbox instead of sending payments to your office. The accounts receivable/cash receipts side of business is where a lot of the theft takes place. If you do receive checks in-house, need to make sure that the person receiving the checks is not the one posting to the AR sub ledger. The individual could be inappropriately posting checks to the wrong customer. Employees that are engaging in this type of scheme will often not take vacation for fear that the scheme will be uncovered.