Two questions from a week-end bed and breakfast type company:
When is it income? For example, weekend balance is due 30 days before arrival. Guests pay Dec. 2007 for January 20th 2008 retreat. Is the income and sales tax 4th quarter 2007 (when we recieve it) OR first quarter 2008 (when we earn it)?
Sales tax on deposit? Similar question to the one above. We require a $50 deposit to reserved a spot for a weekend. We charge tax on the deposit to keep each payment at the county required 3.7% sales tax. It that correct? (we aren't filing the sales tax until the quarter they arrive)
When is it a Fixed Asset? Is every purchase under $1000 an expense? For example, we bought an espresso machine for $600. Do we have to expense this long-lived asset over multiple years through depreciation deductions?
Lease building improvement over $1000 Is a lease building improvement that cost over $1000 just a fixed asset? Or does it have to be a separate fixed asset category, - to be expensed over multiple years through depreciation?
Depreciation occurs of a number of years. How is the number of years determined?