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Old 06-24-2016, 03:20 PM
Sylvie Poulin Sylvie Poulin is offline
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Join Date: Sep 2014
Posts: 7
Accounting Question

Jeff is a sole proprietor of a construction business: a contractor.........Jeff bought a property in 2015 and got his employees to build him a rental duplex......the property and duplex are under his name and not under the business name.........Jeff put all the material and labour as business expenses......his business now shows a huge loss.........How to fix? Should Jeff bill himself for the work done and material bought by his business or should he remove all of the house construction expenses from the business expenses? Problem here is that we cannot remove the labor cost as it was done through payroll.....I would appreciate any suggestions
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Old 06-25-2016, 08:17 AM
Rustler Rustler is offline
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Join Date: Feb 2008
Location: Texas - The Republic
Posts: 2,410
Materials should be posted to owner drawing. you can do that one at a time editing each one, or a summary journal entry for the job expense account
debit drawing
credit materials expense

payroll paid and expensed (or sub contractors payments), needs to be invoiced to Jeff, and he pays it

You could also bring up the sub contractor payment and change the expense account used to equity drawing.

But payroll expense he will have to pay the company back for.
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