R1 Rental Income and Expenses

This workpaper tracks income and expenses related to rental properties.

GST and rental accommodation

The letting out of a residential property is an exempt supply for GST purposes, unless the accommodation falls under the definition of “commercial dwelling” (refer MTG ¶32-052).

Suggested supporting documents

• Rental statements
• Bank statement
• Invoices

Income

Record gross rents received (before property management fees or other expenses are deducted.

Expenses

Enter details of expenses paid during the year in the appropriate rows in the expenses table.

Reconciliation

The reconciliation is provided to ensure all income and expenditure has been accounted for.

1. Opening bank balance: enter the opening bank balance as per the bank statements.
2. Plus capital introduced: enter the total amount of capital contributed by the owners during the year.
3. Less drawings: enter the total amount withdrawn by the owners during the year.
4. Check the closing bank balance corresponds with the closing bank balance on the bank statements.

Create journal

The general ledger balances at the bottom of the workpaper total all the balances of the income received in cells K44 and K45 and the sum of expense balances is recorded in cells O44 and O45.

Where rental income and/or expense accounts are separated, the sum of the general ledger balances can be collated by entering the various account codes on B1.

Where there is a variance, review the transactions in both sets of general ledgers and create a journal entry to record any missing transactions.

See Create a journal automatically or Create a journal manually for further assistance.