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    This post addresses issues in general ledger coding.

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    Do I need to code the "parts used" to repair a company forklift to a "parts" GL account or should I code it all together (with the labor expense) under equipment repair and maintenance account?

    Also, is sales tax supposed to be charged to labor when repairing the forklift?

    © BrainMass Inc. brainmass.com December 24, 2021, 10:29 pm ad1c9bdddf
    https://brainmass.com/business/accounting/post-addresses-issues-general-ledger-coding-481464

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    Do I need to code the "parts used" to repair a company forklift to a "parts" GL account or should I code it all together (with the labor expense) under equipment repair and maintenance account?

    -- You wouldn't use a parts account for the purposes of fixing the company's own equipment. The parts that are used are part of the equipment repair and maintenance account. Also, I am assuming that the labor expense is because the company had to hire someone from the outside to fix the equipment and is not someone that works for the company fixing the equipment. The labor expense (hired from the outside and not on payroll for the company), parts, and other expenses to fix the equipment are all part of the equipment repair/maintenance. You would not separate the parts even if they're parts the company already had in stock to fix the equipment.

    Also, is sales tax supposed to be charged to labor when repairing the forklift?

    -- Again, I am assuming that we have hired an outside person to fix the equipment. The entire amount of the repair bill would go under equipment maintenance. You shouldn't be separating the amount of sales tax paid for the repair. If the repairman did charge sales tax to fix the machine, the total would be recorded. If the cost to repair is $600 and the sales tax is $50, the total of $650 should be recorded. The only time that sales tax is separated is when the company is collecting sales tax on their services. The repairman would record the sales tax your company paid on his books to show which portion came from revenue. There would be no separation for you to record sales tax that you have paid -- the only reason to keep track of sales tax you pay on purchases/services is for income tax purposes, as they are a deduction, however, only the sales tax amounts paid on assets (the actual equipment purchase) qualify.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    © BrainMass Inc. brainmass.com December 24, 2021, 10:29 pm ad1c9bdddf>
    https://brainmass.com/business/accounting/post-addresses-issues-general-ledger-coding-481464

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