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I've had a major mess-up. We run a custom spraying business and are leasing(or buying) our sprayers, new, each winter. I neglected to discharge or sell the previous sprayer back to Case when I entered the new equipment (for several years). Ugh!!!!! Major facepalm moment.
Short of using general journal entries, how can I rectify this? Need to remove them from my capital assets, as well as the associated loans/leases.
Hi Tanya, That sounds like no fun at all! The best place to fix a transaction error (especially capital asset ones) is in the original transaciton where the error occurred. That way it updates the CCA Schedule and your Capital Asset listing automatically and keeps things nice and neat. Print off a balance sheet for the first day of the current fiscal year first though and then once you've gone back and made your corrections, print it off again and any changes. Depending on how you posted the transactions originally, the effect on the balance sheet should be nil. Or at the very lease, a reduction in assets offset by an identical reduction in liabilities, leaving Retained Earnings unchanged. I'm assuming that the discharge amount would have been for the same value as the outstanding obligation so on each transaction, you would just need to edit and add a C- line to remove the capital asset and an L- line to zero out the outstanding liability.