Quicken Personal 2011 - how to Sell a Car?

Hi All,
I am new to this forum and I am new to Quicken as well...
I have created an Asset for my old car, tracking month after month the depreciated value.
Now I am buying a new car and I am wondering what should be the process. The following is my guess:
- Sell the car and "transfer" Car Value to "saving account" (at this point the Car Account will have value "ZERO" - Create a new Account for the New Car (which I will pay half from Saving Account and Half with a loan)
my question are:
- should I keep the "old Car Account" with ZERO Value? - how I transfer the money from Saving to the Car Value? - what is the car value? total car value (with the loan) or only the paid one (in this case half of the real value)?
mmmm I am getting confused...
none has any suggestion???
thanks all
Reply to
Vit
Vit wrote in news:95c209e7-4a0a-4328-8aee- snipped-for-privacy@q2g2000pre.googlegroups.com:
I have never gone this persnickety with my car(s). But here are my opinions. The old car is an asset. Your Car Account should be an asset account. If you sell the car for cash, that should be a transfer from the Car Account to a Cash account. Assuming you transfer the cash to a Savings account, that should be done in Quicken too. Always try to mimick flows of money (either cash or paper value) from the real world to Quicken.
Now you car account should be zero and you may have to adjust the depreciation of the car to reflect that. Remember, the "real" value of the old car is what you get for it when you sell it. No idea how to account for sales expenses (advertising, sales tax, whatever).
Now you buy a new car. That involves a transfer of money from savings to Car Account and a new loan started with the Car Account as collateral. I think Quicken has a "template" of some kind for that.
The "value" of the car (what a willing buyer would pay for it) is what gets assigned to the Car Account, with the loss in value from the price you paid (savings plus loan) paid to be subtracted as depreciation (I think).
Good luck! Let us hear what you finally did, after others have given teir opinions.
Reply to
Han
Hi, Vit.
Me, too. ;^}
Are you trading in your old car? Selling it for cash? Donating it to charity? Junking it? Keeping it? Is there a balance owing on the loan for the old car?
And what does your Saving Account have to do with this?
What do you mean by "the depreciated value" of the old car? As an accountant, I think of this as the original cost of the car, minus "accumulated depreciation", which is the portion of the car's cost that has been recorded as an expense of prior periods. We typically use two accounts, one for the cost and another for the accumulated depreciation; the "book value" is the difference between the balances of the two accounts. If the car cost $10,000 and we've charged $8,000 to depreciation expense in prior years, the current book value is $2,000. If you then sell that car for $1500 cash, the entry would look something like this: Cash $1,500 Accumulated Depreciation (to wipe it out) $8,000 Loss on Sale of Car (an Expense Category) $ 500 Car (to get it off your books) $10,000
But many users don't bother with accounting principles; they simply adjust the car account itself from time to time to reflect the current market value of the car. (Which brings up the question: When they reduce the balance in the car account, where do they put the other side of that entry? If they adjust the car value down from $10,000 to $6,000, does the $4,000 get charged to Car Expense for that year?) If this is the system you are using, then you should make a final value adjustment just before the sale, adjusting to the actual sale price. Then simply record the sale price as cash received and reduce the car account to zero.
If you sell that car for more or less than its "depreciated value", you'll need to account for the difference somehow, in an income or expense category. You can do it as a part of the Sale transaction, or by making your final adjustment to market value just before the Sale entry.
Just record the new car purchase like any other asset you buy: Increase New Car Account; Reduce Cash Account; Increase Car Loan Account. Then start recording monthly car payments. Your Car Account should reflect the full purchase price; your equity is the difference between that - as adjusted for depreciation - and the loan balance, a and for loan principal payments.
If you trade in the old car, the transaction - and the entries to record it - get more complex. I'll wait for clarification from you before I start on that subject.
RC
Reply to
R. C. White

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