How do you treat an asset brought in a limited company by the shareholder in the books of accounts?

Question

shareholder brings in a truck and trailer for carrying fuel.transportaion of fuel is the line of business. it is brought at start of business

Answer 1

Goes into the capital account. Then depreciated each year.

Answer 2

what country are you in, the United States handles assets accounting different then most countries?

Answer 3

The best way is to put a monetary amount on the truck & trailer, and add this to the capital they have put into the company.  This will make up their %age share of the business, e.g.

Truck & trailer = € 5,000

Capital put in = €1,000

TOTAL PUT INTO COMPANY = €6,000

Hope that makes sense.

Answer 4

Assuming that the Shareholder wants paying for the asset at a value agreed with the company then, three possibilities arise. Set the shareholder up as an ordinary creditor of the company for the agreed valuation, and then have the company pay the shareholder on an agreed basis. Or, set up a loan a/c in the companies books for the value of the asset transferred, and then repay the shareholder according to the agreed terms. Or, issue further shares to equate with the value of the asset brought in.

Any of the above would show on the liabilities side of the Balance Sheet, and the double entry would be the truck and trailer shown as an asset in the B/S.

If the shareholder wants no payment from the company. Debit the asset a/c and credit capital reserves.