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Level 1

how to account for complimentary coffee / inherited debt for gift cards

New business owner and trying to figure out how to account for some details

 

Complimentary coffee (machine and materials) for customers and staff

 

also - we bought a business and they had no idea how much was outstanding for gift cards -  we accepted up to $500 in debt for this (the rest will be subtracted at closing) 
As these come in - - do they go under a goodwill category  - -or some form of debt?

 

 

Thanks for your help

2 Comments
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Level 15

how to account for complimentary coffee / inherited debt for gift cards


@RedSoxCyr wrote:

New business owner and trying to figure out how to account for some details

 

Complimentary coffee (machine and materials) for customers and staff

 

I would just ignore it, but if you want to do things correctly

post the fair market value of the machine to other income or donation income

then buy the machine for that same amount

 

also - we bought a business and they had no idea how much was outstanding for gift cards -  we accepted up to $500 in debt for this (the rest will be subtracted at closing) 
As these come in - - do they go under a goodwill category  - -or some form of debt?

 

A gift card you owe is a debt and should be posted to a gift card liability account

 

 

Thanks for your help


 

Highlighted
Level 1

how to account for complimentary coffee / inherited debt for gift cards

First - thanks for responding - - got it on the gift cards
The coffee thing - sorry - my wording was imperfect

We bought a machine and materials to provide coffee and tea for our customers (it was not there before)
Just wondering the category for this

 

thanks again!

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