Q&A (back to index)
Trades or Barters
Posted by parkhill2752 on 03/01/2010 - 00:39
How do you book trading a watch for a value of 2,000.00 our cost and trading for a watch for 1,000.00 value plus 1,000.00 cash from customer?
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Trade of Watch
I think I would debit cash for 1,000, debit inventory for the new watch for 1,000 and credit sales for 2,000. Then, I would debit cost of sales for 2,000 and credit
inventory for 2,000 for the old watch that was given up in trade. Of course, this could be seen as a like-kind exchange and those rules would apply. This is my
idea about this, for what its worth.