Would be worth a call to your tax preparer....because I'm not a tax accountant; I only play one on TV.  (Old joke that only someone over 55 is likely to get.)

The "lying around" parts are a sunk cost & likely can't be included in the dolly's basis.

Purchased parts may be a different story. If their total $$ is over your elected safe harbor amount (typically either $500 or $2000 for most of us--your tax preparer will know), then you can likely accumulate the cost and depreciate the total amount. If you plan to do that, then instead of expensing the parts as you buy them, set up a current asset account for them & post the purchases there. Later when you're done with the project, you can "buy" the dolly as an in-house transaction by transferring the current asset's total value to whatever account you want to use to represent the dolly's basis (depreciable value).

> I'm not really worried about depreciating it but I would like to keep track of what I have into it...

Yeah, for $3,000 invested, most of us would just expense it. If you do that, then set up a Class with a name like "Converter Dolly" and tag all your purchases with that Class. (You'll have to turn on Class tracking in Preferences if you don't have Class fields in your QuickBooks windows.) Then you can get a Class P&L report at any time to see what you've spent on the dolly.

> ...and it will be on my balance sheet when it is done.

Most of us use a market value balance sheet, any your dolly won't likely be worth what you have in it. It's actual market value would likely be either more, or less.  So it depends on where you track balance sheet values. If you do it in a spreadsheet, just assign the value you think it is worth. If you do it in QuickBooks...well, that involves more setup, but makes it easy to generate the entire balance sheet as a QuickBooks report.  If you set up an account for each fixed asset, and you expensed the purchased parts, just set up the asset's initial basis as $0...then assign a market value via whatever you use for preparing a balance sheet (spreadsheet for many people).

Oh, and *do not* think that QuickBooks' Fixed Asset Manager will work for ag fixed assets. It's basically just a tool for tax preparers, and if you aren't also using Intuit's tax software it adds EXTRA work for tracking fixed assets, and is as useful as a thumb you've just hit with a hammer. And, it fails at tracking market values.

If you want details on how to track individual assets in QuickBooks (cash basis recordkeeping only!) The QuickBooks Farm Accounting Cookbook™ Volume IV shows how you can use a separate Inventory Part Item for each asset...which then also automates recordkeeping for fixed asset purchases, sales, and trade-ins, so you have nice reports for your tax preparer at year's end. (I didn't just write about it; I use that method myself for our operation.)

Mark Wilsdorf
Author of The QuickBooks Farm Accounting Cookbook™ series.