Business Accounting Question

[Mark Phillips]

Jane,

Thanks, but as a non-profit, I have to be able to track how much each
"customer" donates to the company less any direct costs. So a $25 check to
the corp for a $15 sweatshirt means a donation of $10. I have to know that
for each donor to report to them at the end of the year.

I also mad the mistake of not setting up business accounts when I started
using gnucash, so I have to "roll my own" as I go along. A great learning
process! ;-)

Mark

On Fri, Mar 11, 2011 at 5:54 PM, Jane Stowe <jane.stowe.boyd at gmail.com>wrote:

> If it's any help/not more confusion......I help at a small charity
> playgroup & when we sell merchandise like t-shirts/dvds etc to raise funds
> it's allocated as follows (using your example of t-shirt costing $15 &
> selling for $25):
>
> 1) Firstly the supplier has been set up as a 'Vendor' & the individual
> parents have been set up as 'Customers'
>
> 2) T-shirt purchased:
> Invoice applied to vendor a/c debiting expense merchandise $15 & crediting
> accounts payable $15. When cheque paid to supplier, a payment is processed
> on the vendor account which debits accounts payable $15 & credits checking
> account $15
>
> 3) T-shirt sale:
> Invoice applied to customer account crediting income merchandise account
> $25 & debiting accounts receivable $25. When payment received, a payment is
> processed on the customer account which debits checking account $25 &
> credits accounts receivable $25
>
> In this way at end of the year you can see how much you spent on
> merchandise (expense merchandise account $15), how much you sold (income
> merchandise account $25), profit would be the difference between these
> totals (income-expense $10), & you'll see what you currently owe the
> supplier (under accounts payable/vendor report) & also what's owed to you
> from individual parents (under accounts receivable/customer report)
>
> HTH,
> Jane
>
>
> -- Sent from my Palm Prē
>
> ------------------------------
> On 11 Mar 2011 23:33, Mark Phillips <mark at phillipsmarketing.biz> wrote:
>
> On Fri, Mar 11, 2011 at 3:14 PM, Robert Heller <heller at deepsoft.com>
> wrote:
>
> > At Fri, 11 Mar 2011 14:56:03 -0700 Mark Phillips <
> > mark at phillipsmarketing.biz> wrote:
> >
> > >
> > > Ok, but how do I handle the check I paid to the merchant for the
> > sweatshirt?
> > >
> > > At time of purchase:
> > > debit merchandise expense $15
> > > credit checking $15
> > >
> > > At time of sale:
> > > Debit checking $25
> > > credit income $10
> > > credit merchandise expense $15
> > >
> > > At the end of the day, my merchandise expense is $0, which does not
> seem
> > > correct.
> >
> > Ah but it is. Your merchandise expense was covered by the sale, with
> > $10 'profit'.
> >
>
> Now I am really confused. When I buy supplies for the office, I credit
> checking account and debit the supplies expense account. At the end of the
> year, I can see how much I spend on supplies. Your approach says at the end
>
> of the year, I spent $0 on team merchandise, when I actually spend $10.
>
> Mark
>
> >
> > >
> > > I would rather not get into inventory and cogs, if I can avoid it.
> > >
> > > What am I missing?
> > >
> > > Mark
> > >
> > > On Fri, Mar 11, 2011 at 1:46 PM, Paul Schwartz <pmjs1115 at yahoo.com>
> > wrote:
> > >
> > > > given your suggested setup, you/I would credit the merchandise
> expense
> > > > account for the $15, debit your checking/bank account for $25, and
> > credit
> > > > your income/donation account for $10.
> > > >
> > > > HTH
> > > >
> > > > Paul
> > > >
> > > > ------------------------------
> > > > *From:* Mark Phillips <mark at phillipsmarketing.biz>
> > > > *To:* Gnucash Users <gnucash-user at gnucash.org>
> > > > *Sent:* Fri, March 11, 2011 12:06:24 PM
> > > > *Subject:* Business Accounting Question
> > > >
> > > > I have a US non profit corporation that takes in donations for out
> two
> > > > softball teams. I recently had new uniforms printed, as well as
> > t-shirts
> > > > and
> > > > sweatshirts for parents. The uniforms belong to the club (ie are
> > returned
> > > > when a play leaves), so I don't allocate the cost of the uniforms
> > against
> > > > the individual donations from each parent. However, when I sell a
> > > > sweatshirt
> > > > with our club logo on it to a parent for $25, and the cost is $15, I
> > have
> > > > to
> > > > deduct the cost of the sweatshirt from the parent's donation. I am
> > having a
> > > > problem thinking through the flow of transactions/accounts.
> > > >
> > > > Simple example: Purchase a sweatshirt for $15, sell to a parent for
> $25
> > > >
> > > > 1. Pay vendor for sweathsirt
> > > > debit club merchandise expense account $15
> > > > credit checking account $15
> > > >
> > > > 2. sell sweatshirt to parent
> > > > credit Income/donation account for parent $25
> > > > debit some account?? for cost of sweatshirt $15
> > > >
> > > > But that is as far as I can go. What account do I debit for the $15
> > cost of
> > > > the sweatshirt? How does that account relate to the club merchandise
> > > > expense
> > > > account?
> > > >
> > > > Thanks,
> > > >
> > > > Mark
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> >
> > --
> > Robert Heller -- 978-544-6933 / heller at deepsoft.com
> > Deepwoods Software -- http://www.deepsoft.com/
> > () ascii ribbon campaign -- against html e-mail
> > /\ www.asciiribbon.org -- against proprietary attachments
> >
> >
> >
> >
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