bookkeeping question

[Wiliam Colls]

On 01/22/2012 10:10 PM, Liz wrote:
>
> I have solar panels and am selling electricity to the same people who
> sell me electricity.
>
> I get an account with a lot of lines, but it could be summarised as
>
> Money I owe them for electricity (with tax)
> Money they owe me for electricity (without tax)
> Money they owe me for electricity (tax position uncertain)
>
> The account just runs into credit until I apply for payment from them,
> which does complicate my account keeping.
>
>
> I'd like the income kept in a separate place so I can compare against
> the capital expenditure on the solar installation.
>
> I also need to keep the small amount with uncertain tax status separate
> until I find out if I pay tax on that income or not.
>
> I've tried twice to work out how to record all this lot, and now I have
> the cheque for my income I need to be able to sort this out.
> I'm sure that a couple of regular writers to this list will assist me,
> and thank them in advance.
>
> Liz
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The absolutely correct answer to this one will depend on where you are, 
and exactly what type of taxes are charged by the electric company, and 
what taxes you may be liable for on the power you sell back. I am in 
Ontario Canada I think this is how I would handle it.

When the bill is received:

                                Debit       Credit
Expense: Electricity           25.00
Expense: PST                    2.00
Expense: GST                    1.25
Income: Power no tax                       30.00
Income: Power maybe Tax                    30.00
Asset: Acc Rec                 31.75

Then when you get the cheque From the power company

Asset: Bank                    31.75
Asset: Acc Rec                          31.75


Couple of Comments: In Ontario PST is straight sales tax at 8%. The GST 
is a value added tax at 5%. If your revenue is below a certain level, 
you don't have to register with Revenue Canada. If it is over a certain 
level you must register, and collect the GST on the power you sell back. 
On the other hand, you then deduct the GST you paid on the power you 
bought, and remit the difference. The cut off is somewhere around 
$32,000.00, so probably not an issue here.

HTH.

William.


-- 
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am not sure that you realise that what you heard was not what I meant.