Bookkeeping Advice Needed

Posted by Allan Martin on September 24, 2006, 8:20 pm

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>>A continuation of my previous post (How to book the purchase of an

>>existing business)...

>> My existing business purchased another business (in the same industry) at

>> another location. We are not operating two stores instead of one.

>> Should I create a new company for the second store (even though it is

>> under the same ownership as the first store) or should I use classes to

>> differentiate between the two? These are the two ideas I came up with

>> but if there are others, I'd be glad to hear 'em.

>> Thanks!

> If you are operating under the same FEIN then I believe that the IRS

> expects you to have 1 company file.

The IRS does not care how many files are kept, they do not care if records
are kept manually or by computer.

Your idea of using Classes to distinquish the 2

> stores is a good one. Just be aware that classes will only work on your

> income statement accounts. If you need to distinquish between the 2 stores

> on your balance sheet then you need to set up separate accounts to

> accomplish this. Use a Parent account with sub-accounts for each location.

Posted by Laura on September 24, 2006, 8:22 pm

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>>>A continuation of my previous post (How to book the purchase of an

>>>existing business)...

>>>

>>> My existing business purchased another business (in the same industry)

>>> at another location. We are not operating two stores instead of one.

>>> Should I create a new company for the second store (even though it is

>>> under the same ownership as the first store) or should I use classes to

>>> differentiate between the two? These are the two ideas I came up with

>>> but if there are others, I'd be glad to hear 'em.

>>>

>>> Thanks!

>> If you are operating under the same FEIN then I believe that the IRS

>> expects you to have 1 company file.

> The IRS does not care how many files are kept, they do not care if records

> are kept manually or by computer.

That's not what I have been advised by my CPA associates.

> Your idea of using Classes to distinquish the 2

>> stores is a good one. Just be aware that classes will only work on your

>> income statement accounts. If you need to distinquish between the 2

>> stores on your balance sheet then you need to set up separate accounts to

>> accomplish this. Use a Parent account with sub-accounts for each

>> location.

Posted by HeyBub on September 24, 2006, 9:21 pm

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Laura wrote:

>>>

>>> If you are operating under the same FEIN then I believe that the IRS

>>> expects you to have 1 company file.

>> The IRS does not care how many files are kept, they do not care if

>> records are kept manually or by computer.

> That's not what I have been advised by my CPA associates.

There is no IRS rule - or law - that requires you to be able to read or
write!

In the instant case, you do NOT have to conform to GAAP or GAAS.

Basic rule: If a CPA or an attorney tells you that you MUST do something,
fire his ass. His job is not to tell you what to do; his job is to take your
goal and make it happen.

Posted by Allan Martin on September 25, 2006, 9:30 am

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>>>

>>>>A continuation of my previous post (How to book the purchase of an

>>>>existing business)...

>>>>

>>>> My existing business purchased another business (in the same industry)

>>>> at another location. We are not operating two stores instead of one.

>>>> Should I create a new company for the second store (even though it is

>>>> under the same ownership as the first store) or should I use classes to

>>>> differentiate between the two? These are the two ideas I came up with

>>>> but if there are others, I'd be glad to hear 'em.

>>>>

>>>> Thanks!

>>>

>>> If you are operating under the same FEIN then I believe that the IRS

>>> expects you to have 1 company file.

>> The IRS does not care how many files are kept, they do not care if

>> records are kept manually or by computer.

> That's not what I have been advised by my CPA associates.

As a CPA, I to, would most likely advise using a single company but for the
reason that it simply makes sense to do so and not because the IRS requires
it, which it does not. Not all advice given by CPA's are borne by a
connection to tax laws just as not all advice given by doctors have medical
implications.

>> Your idea of using Classes to distinquish the 2

>>> stores is a good one. Just be aware that classes will only work on your

>>> income statement accounts. If you need to distinquish between the 2

>>> stores on your balance sheet then you need to set up separate accounts

>>> to accomplish this. Use a Parent account with sub-accounts for each

>>> location.