Balance Sheets

[Chris Bester]

Hi John

Your suggestions are appreciated.  Thank you for a very comprehensive reply.
However, rather complicated.  We only have one form of income "Members
Fees",  we have no liabilities, our only asset is money in the bank, no
depreciation and a limited range of expenses.  Therefore, I think it would
be much easier to create a spreadsheet and manually enter information from
my "Income Statement" on a monthly basis.  On such a spreadsheet I can enter
opening balances manually.  Entering the necessary formulae will do the
calculations as I go along.
Thanks in any case, I will put your suggestions on file as I am sure they
will come in handy in future.  By the way, can somebody explain to me what
the word "Equile" mean in "Balance Sheet (Equile )"?

Chris

 

-----Original Message-----
From: gnucash-user-bounces+chrisbester=cybersmart.co.za at gnucash.org
[mailto:gnucash-user-bounces+chrisbester=cybersmart.co.za at gnucash.org] On
Behalf Of John R. Sowden
Sent: 05 January 2014 01:39 AM
To: gnucash-user at gnucash.org
Subject: Re: Balance Sheets

On 01/04/2014 01:00 AM, Chris Bester wrote:
> Hi There
>
>   
>
> Re:  My problem with Balance Sheets.
>
>   
>
> In order to solve my problem regarding opening and closing balances, 
> Maf and Derek suggested that I create two Balance Sheets, side by side 
> in the multicolumn report and Tweak or Message them. I have entered 
> two Balance Sheet (Equile) next to each other, because I find this 
> Sheet a better way of communicating my organisation's  financial situation
to my committee.
> Question; what do I do now, these two sheets are exactly the same, how 
> do I Message or Tweak the new financial year's Sheet to start all my 
> accounts from zero and my asset accounts with last year's ending 
> balances and not the same balance the previous year started with?
>
> Thanks for your help.
>
> Chris
The are several steps that you need to take to start the new year. These are
General Journal entries, meaning not from the checking account.

Move all of the income to an "Income Summary" account.
   Debit the income from each income account for the "old year".
   Credit Income Summary for each of the amounts.

Next Move all of the expense account amounts from the expense accounts to
the "Income Summary" Account.
   Debit the Income Summary account for each below amount.
   Credit each expense account for its total.

Move the difference between the two, hopefully a credit amount (profit) to
the equity account.
   Debit the Income Summary Account for its balance.
   Credit the Retained Earnings account, if a corp.

Next you need to deal with the assets and liabilities.

Hopefully during the year, as you paid off loans, etc., you debited the
interest to the Interest Expense account and debited the balance of the
payment to the Liability "Truck Loan" (or whatever) account, thereby
lowering the amount of the Liability.

Additionally, at the end of each "accounting period", that is, when you
choose to present the financial state of you organization to yourself for
posterity, or to others, such as quarterly, you should be posting
Depreciation, that is, reducing the value of any fixed assets as they are
consumed, down to the Salvage Value.  You depreciate the "Salvage Value"
when you dispose of the asset.

   Credit the depreciation account for the depreciation amount from your
Depreciation Schedule for this asset.
   Debit the Accumulated Depreciation account by the same amount.

Subtract the Accumulated Depreciation from the asset account.  That is the
ending balance of the asset.

You now would have the information needed to create the closing balances of
the 'old year', which is the same as the beginning balances of the 'new
year.

Hope this helps

John


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