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Advanced Member
 
Group: Forum Members
Last Login: 11/10/2008 4:22:06 PM
Posts: 43,
Visits: 110
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| Hi, I was looking at a trial balance to make sure everything looked right when I noticed there were 5 small rounding errors ranging from 1 cent to minus $94 for securities I no longer own. Is there a really simple way to get them to zero of do I just have to journal each one out and If that's the answer what account do I book them to? Regards
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Advanced Member
Group: Forum Members
Last Login: 11/10/2008 4:22:06 PM
Posts: 43,
Visits: 110
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| Hi, Further to this issue, I have been updating my Instalment warrant records to record dividends received. In line with your suggestion last year I have been recording the dividend going to a clearing account and then Dr the warrant and Cr the clearing account to recognise the income actually went to the warrant. The problem I have is I have sold the warrant before I have this information so I have already recorded the sale. This means the trial balance shows the value of the warrant equal to the dividend received and gain on the sale of the warrant is consequently overstated. I was going to reverse the sale through the General Journal and reverse the transaction through 'view and edit sale records'. Doing that flagged a warning box that if there has been a capital repayment I could do myself a mischief. Can you advise if it is safe for me to do what I planned? Regards
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MySF Administrator
Group: Administrators
Last Login: 16/11/2008 4:08:05 PM
Posts: 281,
Visits: 378
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Hi,
This is in response to your first post.
When an asset is sold the account that represents the asset in the GL should fall to zero. If it did not then this means that the cost base of the asset was not the same as the balance of the account.
If the remaining amount is positive then that would generally mean that the Capital Gain calculated on the sale was understated by that amount. You should therefore journal these amounts to the Capital Gain Taxable or Capital Gain Non Taxable amount. The split between taxable and non taxable should be in the same proportion as the last sale that had occurred for that asset.
You should also check that the cost base of your remaining assets is in agreement with the balances of those accounts by going to System Setup > View and Edit Asset Cost Base.
Regards,
MySF
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MySF Administrator
Group: Administrators
Last Login: 16/11/2008 4:08:05 PM
Posts: 281,
Visits: 378
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Hi,
This is a response to your second post.
What you have described here may be what is causing the problem outlined in your first post.
When you record the DR to the asset's account and a CR to the income account you should go to System Setup > View and Edit Asset Cost Base and make sure that the change you have made is reflected in the sale. Otherwise the amount debited to the account will not be recognised and it will be left over after the sale.
Additionally, any modifications to the cost base of the asset must be done before you record the sale as the software cannot retrospectively adjust sale figures. This is why you are seeing the warning. To correct the issue you would need to reverse the sale and the transactions created from the sale, then adjust the cost base and record any other transactions for this asset and reprocess the sale.
It sounds like what has happened here is that the sale was processed at the old cost base for several assets and now the amount of the adjustments is still remaining in the accounts.
Regards,
MySF
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Advanced Member
Group: Forum Members
Last Login: 11/10/2008 4:22:06 PM
Posts: 43,
Visits: 110
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| Hi, I've tried to have a good look at the transactions to see at what point I may have gone wrong but when it comes to the Instalment Warrants it's a nightmare. The transaction report will show me a purchase, a sale, dividends received and the general journal entry for recognising prepaid interest each month (Cr 1149, Dr 5165) but it doesn't show me entries Dr 1149 and Cr 1154 to strip out the prepaid interest on purchase of the warrant and it doesn't show me the entries for Dr 1154 and Cr 1104 (clearing account) to increase the value of the warrant when a dividend is received. It's very hard to see where the discrepancies have arisen . If the trial balance values exactly matched the dividends I could understand what was happening but they don't and it's impossible to see where I have erred. Is there a way I can generate one report that shows for an Instalment Warrant the purchase, adjustments for Interest and dividends, sale and capital gain recognised for just one warrant at a time? Regards
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MySF Administrator
Group: Administrators
Last Login: 16/11/2008 4:08:05 PM
Posts: 281,
Visits: 378
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Hi,
There is no report that shows these for a given asset.
Your best option would be to go to System Setup > General Ledger and find the account under "1000 Asset" that represents the warrant in question. Double click on the account and you will get a list of all of the debits and credits that have touched this account.
If there is not enough information there then the transaction date / numbers can be used to look up the details of the transaction in the Transaction Reporter.
Regards,
MySF
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Advanced Member
Group: Forum Members
Last Login: 11/10/2008 4:22:06 PM
Posts: 43,
Visits: 110
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| Thanks Guys That gave ne exactly what I needed to understand where I had made a mistake. Can I suggest a wizard for Instalment warrants? If you had something that held the sale in suspense until the dividends had been recorded (usually around this time of year) or something that prompted you to reconcile the cost base I think I could have largely avoided the problems. I think there still is a rounding error in your program. On one holding I had an opening balance entry of $41911.60 and on sale it recorded the value of the warrant at $41911.50. There were no adjusting entries on the way though. I think I will remember what to do in a years time but it is a nightmare to sort out the first go. Regards RE
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MySF Administrator
Group: Administrators
Last Login: 16/11/2008 4:08:05 PM
Posts: 281,
Visits: 378
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Hi,
Dealing with installment warrants is unfortunately quite difficult at this time. We are currently reviewing the usability of the software in another area (setup and opening balances) with a goal to improving the process, decrease errors and we will also look at installment warrants after that.
Holding sales in suspense would be quite difficult because anything that is not committed to the accounts would not show up on financial reports, diminishing the usefulness of the solution. However, we will try to find an alternative solution to this problem.
Regards,
MySF
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