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New Company's closing entries causing trouble

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  • New Company's closing entries causing trouble

    We purchased a machine shop and moved a manual accounting system to Peachtree successfully. During the closing, we bought a portion of the AR, which is a standard negotiation. Upon arriving at the dollar amount, we made a "total" debit entry for all of the AR line items we bought to accurately reflect the closing assets for the bank, et al. All good for now, back then...

    But now, the problem is we created the actual sale journal entries for the actual line items as the checks were received. (We created back dated debits and actual date credit as the line items' payments were received). We had to back into this, as the previous owners had a tenuous control on these transactions.

    The Good; All is OK from a total sales and AR perspective in the monthly reports.

    The Bad: But the Balance Sheet shows this debit in the Total AR calculation in Assets.

    What we tried: The double entry system keeps us from removing this "total" place holder transaction. It shows up in the GEN Journal when viewing the AR General Ledger. We've tried a credit memo in the Sales Journal, but is messes up Year Total Sales. We've tried zeroing out the redundant debits that add up to the "total" entry, and it messes up the total sales.

    So we're stuck and hope someone has a suggetion. Basically, if we knew better, we wouldn't have made this entry and would have made the individual entries. I've manually reconciled the debits and credits from the GL AR account in MSExcel and it matches the monthly revenue and AR values from the canned reports.

    We need a method to eliminate or move this transaction in a way we can zero it's affect on our reporting of assets.

    Thanks!

    -Gary

  • #2
    You need to go back into the opening financial period and correct that original entry...

    Do you have the details of the "total A/R" you purchased figured out? Your opening trial balance should include this A/R purchased. You need to go into the Maintain customer screen and click on the Beginning Balance button. Here you can enter the details of the A/R balances by customer. This will allow you to clear each opening balance as they were paid.
    ~Laura~
    Certified Bookkeeper
    Cape Cod, MA
    Soundbookkeeping@gmail.com

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    • #3
      Thanks

      Hi Laura:

      Thanks for the help. We have the details and will look at this option. I've not tried this yet.

      There's a single entry for the closing debit of $72K, and then the redundant debits for each line item, as the payments (credits) were received.

      Thanks,
      -Gary

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