car dealership inventory

[atsChristy70]

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

[rjs]

Are you the dealer?

[Mike9241]

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