Reports Menu -> Automatic Reporting -> Function RSBS02 -> runs Bulk Disposals Report
When Non-bulk rental inventory is sold, and the sales invoice is
posted using Daily Close 1, Daily Close 2, and Daily
Close 3 programs, the revenue from the sale and the cost on
disposal are automatically posted to the General Ledger.
At the same time a Disposal Record is written, which can later be
reviewed in Disposal Transactions Report
to determine if any depreciation adjustments are required.
When the sale of a Non-bulk rental product is reversed, the
equipment is returned on a credit invoice with a negative quantity.
This "negative sale" is recorded in the Bulk Disposals file until
the relevant Fixed Asset Tag is determined.
When the Disposal Transaction is selected, the corresponding Fixed
Asset Tag is updated and the appropriate transactions to reverse
the Inventory and COGS postings are written to the Rental Journal
Transactions file in preparation for posting on the next Daily
Close posting to the G/L.
If the post Depreciation feature has been activated from the Company Posting Parameters, then the posting to clear Depreciation for the sold equipment is now also reversed in the G/L.
Two Options for Selecting Costs for Bulk Items:
To handle multiple tags, the sale of any bulk rental equipment writes a record into the Bulk Disposals file, and the cost posting is temporarily held out of Daily Close 2 . The revenues, services and taxes which result from the invoice are immediately posted, and will appear on reports from Daily Close 3.
On a regular basis, usually part of month end close, the Bulk
Disposals must be reviewed to pick the Fixed Asset Tags and
complete the cost postings. The costs will appear on the Rental
Journal Report next time Daily Close 3 is
run.
It is important to complete Bulk Disposals regularly in order for
the correct costs of the equipment to be recognized in the General
Ledger, Detailed Product History and Monthly Product History, and
Disposal Transactions.
A flag in the Company Posting Parameters,
can be set to automate the selection of the Fixed Asset Tag in the
Daily Close for the disposal or sale of Bulk Rental products with
multiple Fixed Asset Tags.
When this feature is activated the tag with the oldest acquisition
date is automatically updated with the disposal information and the
inventory value posting reflects the value from that oldest
tag.
Records are only written to Bulk Disposals
when there are insufficient Asset Tag quantities, or when a
disposal is being reversed, and the tag then needs to be selected
manually.
The Disposal Transaction Record is written, that can be review in Disposal Transaction Report to determine if any depreciation adjustments is required.
Since the Salesman Commission Report relies on the costs of equipment to determine Gross Margins on Sales and Disposals, the Bulk Disposals must be completed before the report can be run.
Posting Asset Value on Disposal:
The Bulk Disposal formula to calculate the Book Value Cost
is:
BOOK VALUE EACH at disposal for the selected tag, multiplied by the
Fixed Asset Tag QUANTITY, to equal the TOTAL COST at disposal
The Total Cost is displayed on the screen when accepting the Fixed
Asset Tag.
The disposal costs are posted to the G/L Accounts defined in the
Rental Product Classes assigned to the
product.
The INVENTORY ACCOUNT is credited and the COST OF GOODS SOLD
ACCOUNT is debited with the TOTAL COST amount.
Example: Rental Item is sold (i.e. a drill) SELLING PRICE $ 400.00 SELLING PRICE 400.00 COST - 300.00 BOOK VALUE - 250.00 ACCUM. DEP. + 50.00 ----------- ----------- PROFIT ON DISPOSAL $ 150.00 $ 150.00 System Generated posting records: Sale of Rental Equip CREDIT 4090 for the selling price $400.00 Accounts Receivable DEBIT 1200 for the selling price 400.00 Rental Inventory CREDIT 1300 for the Book Value 250.00 Cost of Rental Equip Sold DEBIT 4510 for the Book Value 250.00
POSTING AVERAGE COST ON DISPOSALS
The alternative choice to post disposals by Average Cost is controlled by the same setting in the Company Posting Parameters.
The Bulk Disposal formula to calculate the Average Cost is:
COST EACH at disposal for the selected tag, multiplied by the Fixed
Asset Tag QUANTITY to equal the TOTAL COST at disposal.
The Total Cost is displayed on the screen when accepting the Fixed
Asset Tag.
The Depreciation on the Tag selected is NOT automatically posted to the General Ledger. The Depreciation which does apply to that item is recorded automatically on the Disposals Transactions Report and the Fixed Asset Tag is updated. The depreciation does NOT automatically post to the General Ledger, so that Accountants and Controllers can review the depreciation amount and make an independent assessment. By printing the Disposal Transactions Report, your accounting staff can see each disposal, the costs and depreciation associated with each. They will be able to determine if a Journal Entry is required for the Depreciation adjustments.
The depreciation would be recorded later by the accountant, or controller, after reviewing the Disposal Transaction Report.
Example: A Rental Item is Sold SELLING PRICE $ 400.00 SELLING PRICE 400.00 COST - 300.00 BOOK VALUE - 250.00 ACCUM. DEP. + 50.00 ----------- ----------- PROFIT ON DISPOSAL $ 150.00 $ 150.00 System Generated posting records: Sale of Rental Equip CREDIT 4090 for the selling price $400.00 Accounts Receivable DEBIT 1200 for the selling price 400.00 Rental Inventory CREDIT 1300 for the purchase cost 300.00 Cost of Rental Equip Sold DEBIT 4510 for the purchase cost 300.00
MANUAL POSTING FOR THE DEPRECIATION using Miscellaneous G/L Journals
Accumulated Depreciation (Rental Equipment) Acct #1301 DEBIT $ 50.00 Cost of Rental Equip Sold Acct #4510 CREDIT $ 50.00
For the Date, use the Month End.
For the Reference, use DEPRECIATION ON EQUIPMENT SALE.
For the Details, use the product number and/or Invoice number.
To help determine when the accumulated depreciation journal
entries are required, the system tracks every rental equipment
disposal and produces a Disposal Transactions
Report.
Print this report monthly and review it to determine the
accumulated depreciation to be recaptured for each item. Post the
RECAPTURE total to the General Ledger using Miscellaneous G/L Journals according to the manual
posting instructions above.
Recapture & Gain/Loss Definition
Rule 1: When the Selling Price is greater than the Cost:
GAIN = Selling Price - Cost RECAPTURE = Cost - Book ValueRule 2: When the Selling Price is less than or equal to Cost but is Greater than the Book Value:
GAIN = Zero RECAPTURE = Selling Price - Book ValueRule 3 When the Selling Price is less than the Book Value:
LOSS = Selling Price - Book Value RECAPTURE = ZeroUsing the definitions above, the Disposal Transactions Report shows the Recapture and Gain/Loss like this:
COST DEPRECIATION BOOK VAL SALE PRICE RECAPTURE GAIN/(LOSS) ---- ------------ -------- ---------- --------- ----------- Rule 1 300.00 50.00 250.00 400.00 50.00 100.00 Rule 2 300.00 50.00 250.00 275.00 25.00 0.00 Rule 3 300.00 50.00 250.00 180.00 0.00 -70.00
Note: The security by division feature as determined by Divisional Restricted Views, does NOT apply to the Bulk Disposals utilities.
ALLOCATE BULK DISPOSALS:
The prompts to clear
the disposal records in preparation for completing the posting
include:
Once the tag selection is completed , the outstanding quantity
to be allocated is reduced and the balance to be allocated is
redisplayed.
When the balance to be allocated reaches zero, the product
disappears from the Bulk Disposals list.
Finished?
Click ACCEPT to accept the information, and run Daily Close 3 to complete the postings. The Bulk
Disposal posting amounts appear on the Rental Journal
Transactions Report.
A Reminder to Contact Leasing Vendor warning is triggered if the rental product has been assigned one in the Lease Information window in Rental Inventory.
If there is not enough quantity on the tag in Allocate Bulk Disposals, or if there is no tag at all adjustments can be made as follows:
If the product is a non-bulk product and it is listed in Allocate Bulk Disposals it could be because the product did not have an asset tag when it was sold. In this case, follow these procedures:
For large volume party rental companies, the following is suggested as a daily procedure:
Prior to the close of each month, run Verify Tag Quantity = Loc Qty and then check Allocate Bulk Disposals.
ACTIONS:
Additional actions provided by buttons on
the Bulk Disposal screen include:
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