See Also Property vs Separate Owner ID’s
Startup, Initialize Accounts
How to PDF document #219 - Initialize Owner Balances
If you start PROMAS at the beginning of the year, you need only enter owner balances using Procedure A or B at the end of this section, whichever is applicable. When you start PROMAS mid-year you have several options for entering owner balances and handling the year-to-date transactions. Your decision on how to proceed depends on how you want to handle the year-end reporting.
Situation 1
• End of Year Statement - One statement from your previous system and one from PROMAS
• 1099 - One 1099 from your previous system and one from PROMAS
1.
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Initialize the owner balances as of the day prior to starting PROMAS using Procedure A or B below as appropriate.
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2.
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At the end of the year produce a statement and a 1099 from each system.
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Situation 2
• End of Year Statement - One statement from your previous system and one from PROMAS
• 1099 - One 1099 from PROMAS
1.
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Initialize the owner balances as of the day prior to starting PROMAS using Procedure A or B below, as appropriate.
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2.
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At the end of the year produce a statement from each system.
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3.
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To adjust the 1099 amount to include amounts received prior to PROMAS you make adjustments to take into account the taxable income received prior to using PROMAS.
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4.
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Go to <<GL, Journal Voucher>>
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5.
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Change the date to the day prior to starting PROMAS
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6.
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Select the Ledger (owner/property)
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7.
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Enter 2 line items – the first for Rent for the amount of taxable income; the second for Cash Distribution – a negative amount.
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8.
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Click <New> to record and enter another or <Post> if you are finished
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Situation 3
• End of Year Statement - One statement from PROMAS
• 1099 - One 1099 from PROMAS
You can use an income statement, balance sheet or trial balance through or as of the day prior to your starting date. Thus if April 1 is your start date, then an income statement from the beginning of the year through March 31, or a balance sheet or trial balance as of March 31 is required. See Example 1 below.
Prior to entering the Journal Voucher you must verify that there are no transactions posted to the ledger on or before the start date. This will be the case if you have entered tenant prepayments. If there are transactions posted, run an income statement and change each account by that amount so the end result will match your initialization data.
1.
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Initialize the owner balances as of the last day of the year, rather than the day prior to starting PROMAS, using Procedure A or B below as appropriate.
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2.
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Enter a journal voucher for the net year-to-date amounts for each account that affected the owner balance while the records were being kept using the previous system. (If tenant advance payments were posted, run an Income Summary in PROMAS and subtract those amounts from the amounts posted.
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3.
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At the end of the year do the 1099's and End of Year statements from PROMAS.
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Example 1 (for Situation 3 above)
Income Statement 1/1 - 3/31 from previous program
Beginning Balance $50.00
Income
Rent $2550.00
Expenses
Mgmt Fee $204.00
Mortgage $1124.46
Plumbing $142.27
Pay to Owner $929.27
Net Balance Change $150.00
Ending Balance $200.00
Post in PROMAS:
Adjust Bank Account – for $50 as of 12/31 of last year (see procedure A below)
Journal Voucher -- Date - 3/31
Account
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Account Type
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Debit or Credit
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Amount
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Rent
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Taxable Income
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Credit
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$2550
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Mgmt Fee
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Expense
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Debit
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$204.00
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Mortgage
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Other Exp.
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Debit
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$1124.46
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Plumbing
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Expense
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Debit
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$142.27
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Cash Distrib.
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Equity
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Credit
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-$929.27
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Bank Account
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Current Assets
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Debit
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-$150.00
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The beginning balance of $50 is established with the Adjust Bank Account with a date of December 31 of last year.
The $50 beginning balance and the bank account debit of $150 makes the owner’s ending balance for March 31 equal $200.
NOTE: If your accounting method is other than cash, before entering the owner or property balances you must enter all outstanding Accounts Receivable and Accounts Payable items. These may affect the entries you make in the Journal Voucher function.
Procedure A - Owner Positive Balances
1.
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Go to <<GL, Adjust Bank Account>>
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2.
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Change the [Date] to the day prior to your starting date.
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3.
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Select the [Bank] account from the Find List.
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4.
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Select the owner, property or unit from the [Ledger] Find List.
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5.
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Click the <Interest> or <Other Increase>.
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6.
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Change the Reference to Balance Forward (optional)
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7.
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Select Retained Earnings from the Find List for [Account].
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9.
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Click <New> to add more balances or <Post> if you are finished.
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Or
1.
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Go to <<GL, Journal Voucher>>
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2.
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Change the [Date] to the day prior to your starting date.
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3.
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Select the [Ledger] (owner, property or unit) from the Find List.
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4.
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Enter two line items, one a credit for an [Account Type] of Equity (such as Retained Earnings) and one a debit for the bank account (Account Type of Current Assets).
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5.
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Click <New> to add more Journal Vouchers or <Post> if you are finished.
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Procedure B - Owner Negative Balances
1.
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Go to <<GL, Adjust Bank Account>>
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2.
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Change the [Date] to the day prior to your starting date.
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3.
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Select the [Bank] account from the Find List.
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4.
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Select the owner, property or unit from the [Ledger] Find List.
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5.
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Click the Service Charge or Other Decrease.
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6.
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Change the [Reference] to Balance Forward (optional)
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7.
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Select Retained Earnings from the Find List for [Account].
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9.
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Click <New> to add more balances or <Post> if you are finished.
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Or
1.
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Go to <<GL, Journal Voucher>>
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2.
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Change the [Date] to the day prior to your starting date.
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3.
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Select the [Ledger] (owner, property or unit) from the Find List.
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4.
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Enter two line items, one a negative credit for an [Account Type] of Equity, and one a negative debit for the [Account code] of the bank account (Account Type of Current Assets).
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5.
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Click <New> to add more Journal Vouchers or <Post> if you are finished.
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