Sale, but not resale...

Posted by grep on July 22, 2007, 5:39 pm

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Thanks! That makes sense.

grep

Scott wrote:

>>Allow me to clear this stuff up a bit, since it's taken me quite some time

>>to get back here:

>>I'm a computer reseller, so you weren't insane to infer that I didn't pay

>>sales tax on it. In this case, however, you'd be wrong. She needed a new

>>printer, so I went to Office Depot and bought her one. I paid sales tax on

>>it there. That's the reason for the question: I didn't want to pay sales

>>tax on it twice. Not only that, but since I already paid sales tax, if she

>>were to also pay sales tax, she would be paying it on top of the sales tax

>>I already paid, bringing her tax amount to higher than the tax I already

>>paid! Craziness...

>>So that's what I was trying to get out of.

>>Now I'm still not entirely sure I understand all your answers, but it

>>certainly does give me what to think about.

>>Thanks,

>>grep

>>Allan Martin wrote:

>>>

>>>>I own two businesses: Mine, and my wife's (co-owner). Yesterday, my

>>>>wife's biz needed a new printer, so I purchased one with my biz credit

>>>>card. My wife's biz paid me for it.

>>>>

>>>>How do I account for this? I don't want to invoice her and charge her

>>>>sales tax on the printer (I'm a computer equip. reseller, btw). I just

>>>>want to transfer the cost to the other biz.

>>>>

>>>>Any suggestions?

>>>

>>>Record the credit card purchase to a balance sheet account called Due

>>>from Wife's Biz. Record the check received from your wife's biz to the

>>>same account.

>>>

> Set up a current or other asset account called "Due From <other company

> name>" & run everything through that. Every time you pay for something that

> belongs to the other company, use this account instead of an expense

> account. When you receive reimbursements from the other company, use this

> account instead of a revenue account. The amounts should wash.

> Scott out.