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November 26, 2024
Question

car dealership inventory

  • November 26, 2024
  • 3 replies
  • 0 views

How do you handle trade-ins.   Is it treated like you purchased that trade-in for cash?

 

Sale               100

trade in           50

 

Used Inventory        50

   trade-in                               50

 

    3 replies

    Employee
    November 26, 2024
    No text available
    rjs
    Employee
    November 26, 2024

    Are you the dealer?

     

    Employee
    November 26, 2024
    No text available
    November 26, 2024

    get an accounting firm that handles car dealerships. it's not that simple with all the complex tax rules such as 263A (UNICAP).

     

     

    as to the potential bookkeeping entries

    debit cash $50 (or whatever) for the difference between the sales price of the vehicle and the value of the trade-in

    debit inventory for $50 the value of the trade-in

    debit cost of sales for the inventory value of the vehicle sold

    credit sales $100]

    credit inventory for the value of the vehicle sold.

     

     

    also you could have issues with sales tax and possibly other reporting matters