Nominal Code Sage Purchase Of Company

Nominal Code Sage Purchase Of Company

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I purchased a company for £52,500 and paid 6 months rent as a deposit (I am trying to do my bank rec on sage) but the codes for these two expenses are not evident can anyone please help me? My VAT return is due so am desperatley trying to get this done,

Thanks

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By User deleted
05th Dec 2011 22:12

They are not expenses

It's been a long time since I looked at Sage but you should have codes in the balance sheet section for investments (for the purchase of the company's shares) and prepayments or sundry debtors (for the rent deposit). If not there, you may have to create new nominal ledger codes.

Caveat - I don't do accounts or book-keeping, I do tax - I'm sure there are others here that can give a more precise answer.

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By JKnight
05th Dec 2011 22:30

I don't think there is a default Sage nominal code for investments (nor goodwill). If the £52,500 was for the company's shares I suggest you create a new code in the Fixed Assets range for the investment, say 0090.

 

 

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By RachelT
06th Dec 2011 06:45

THanks for your help guys I bought the company outright so the company belong to solely me now and I just dont knowwhere to code this too. I can do the basic bookkeeping but need to be sure I have the purchase of the property in the right code to show on my balance sheet for my assets.

For the rent deposit (I bought the company not the actual proprty this is rented as it was from the previous guy) so I wasn't sure if the deposit needs to go into rent or prepayments.

Again thanks for your help its appreciated :)

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By Richard Willis
06th Dec 2011 08:57

When you say 'The Company'

is it actually a limited company or just a business?  If the former you just need an 'Investment in (Name) Ltd' account.  If the latter I think that you will need to show the assets acquired + any good will.  I am rusty in this area vis-a-vis the tax position so hopefully someone may clarify.

ALSO - Is this (the new one) your only business or do you have an existing one?  If the latter will you be running the new one stand alone or merging it with your existing?  These are all factors that need to be considered.

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By RachelT
06th Dec 2011 09:15

It is a ltd companyand it is my only one to the value of £52,500 and I want to get the journals right to make sure I have accounted for everything. I do not intend on buying another company certianly not at this stage anyway so this is a stand alone deli business

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By cparker87
06th Dec 2011 12:15

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It depends on what has actually happened really.

1. If you have purchased the shares of the Company, from the individual who used to own it, I imagine the entries would be:

Credit B/sheet Director Loan with amount paid in advance for RENT

Debit RENT paid to P&L. You will need to account for a prepayment if you want to do accurate monthly figures.

The amounts to be allocated to cost of shares are irrelevant, the Company has not purchased or sold any shares - the individual has. This will also be your tax base cost.

 

2. If you have purchased the business from another via the medium of a Company (i.e. your Company acquired shares), the entries would be:

Debit B/sheet Assets with MV allocated

Debit Rent charge to P&L

Debit B/sheet residual as "Goodwill"

Credit B/sheet DLA with amount paid

 

3. If you subscribed for shares in the Company before purchasing (e.g. you have a share premium account) and then purchased the business out of a Company or from an individual you would do same as above except credit would be to Cash as you should already have entered Dr Cash and Cr Share Cap & Share Premium

 

Hope this helps.

 

 

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By Richard Willis
07th Dec 2011 12:21

Just had a thought, (I know, unusual!)

Are you talking about the acquisition of this company in books representing you as purchaser or are you setting up the books of account OF the company on a (?new) system?  If you have purchased the company as a going concern it should already have books of account and a b/f p&l and balance sheet.  The purchase of said company does not go into its own books but into your personal accounts and tax where relevant.

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