Receiving a Credit….Revenue or Expense

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    Topic
  • #2270187
    itsj0nathan
    Participant

    Here is a question….Say for example I just traded in a vehicle to purchased another vehicle, how would I book this entry? I know this would most likely be booked as a fixed asset and then depreciated over time. But lets take that out If Id rather expense this at once. Do I book the trade in $ as a revenue? Or would you just expense the entire Dr $15K expense and CR $15K cash?

    New Car -$20,000
    Trade in: ($5,000)

    Total Cost $15,000

    BEC- 71, 7/02/16
    AUD- 67
    FAR- 08/27/16
    REG- 10/15/16

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  • #2270403
    Kerias
    Participant

    Review like kind exchanges

    AUD - 82
    BEC - 77
    FAR - 79
    REG - 76
    This is a marathon not a 100 yard race!!!!!!!
    #2272947
    ohiocpacma
    Participant

    Tax wise – I don't know. Not a tax accountant.

    Accounting wise:
    Trade in should be considered a sale of an asset (Gain/loss as revenue).
    The new car would be capitalized at it's price of $20K and depreciated.

    We want to avoid any criticism of the way we administer this liberal gift. For we are taking pains to do what is right, not only in the eyes of the Lord but also in the eyes of man. 
    #2273022
    StudyNowCPA
    Participant

    Review like kind exhanges!! This will be on the exam and there are special rules for this. You will need to know this! BTW… as a general rule it will never be that easy…dr exp and cr cash when assets are involved.

    "Do or do not, there is no try." - Yoda

    FAR - 83

    AUD - 75

    REG - 76

    BEC - 82

     

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