Company XYZ has the following fixed assets:
Asset Purchase Cost
computer 10,000.00
furniture 5,000.00
The general ledger accounts associated with the fixed assets are:
Account Description
300 Equipment & Furniture
400 Deprec. Equip. & Furn.
900 Deprec. Expense Equip. & Furn.
These accounts were created when all the general ledger accounts were initially entered. All the accounts have an initial balance of zero except the controlling account (300). A general journal entry was made debiting the controlling account for the total purchase cost of the fixed assets.
The screen below shows the detail lines of the general journal entry to the controlling account for the total purchase cost of the fixed assets.
Notice that the total purchase cost of all the fixed assets, $15,000.00, is entered into the Amount field.
Entering Fixed Assets to Fixed Asset Master File
The following screens show the entries made for the assets in our example to the fixed asset master file. The screen is accessed by selecting Fixed Assets from the Select, Fixed Assets menu. For detailed instructions on entering a fixed asset, refer to Chapter 4, Fixed Assets in this manual.
The screen below shows the entries made for the asset: computer.
The entries for the furniture asset are as follows:
Notice that an amount has been entered into the Accumulated Depreciation field. Obtain this amount from your old accounting system. This is the amount of depreciation that has accumulated to date. This is the only time you enter an amount in this field. Once the system is set up and running, this field is automatically updated by the system.
Entering Fixed Asset Balances
Now that the fixed assets have been entered into the fixed asset master file, their purchase costs can be entered through general journal entries. Each fixed asset is debited for its purchase cost. The Fixed Asset controlling account is credited for the purchase cost of each asset. The screen below shows the detail lines of this entry. The screen was accessed by selecting General Journal Entries from the Data Entry, General Ledger menu.
Run the report Asset Master on the Reports, Fixed Assets menu to verify that each asset has been costed correctly and that the total asset amount is correct.
This completes the fixed assets set up procedure.