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I’m looking for help on a non monetary exchange question. i need to decide if the journal entries are correct and if not make adjusting journal entries.
The question is:
During the 2014 fiscal year, a Music store exchanged an inventoried product that would normally sell for $1,650 for a computer system that sold for $1,800. The transaction was booked in the accounting records as follows:
DR Computer equipment 1,800
CR Revenue 1,650
CR Gain on purchase of equipment 150
DR Cost of goods sold 1,500
CR Inventory 1,50DR Non Current Asset – Computer System-$1650
CR Inventory-$1800
CR Income Received -$150Not sure if this 100% correct but, you are now gaining part asset part income for a good sold…but either way your assets should increase, inventory should decrease and you should account for the profit made in some way. The profit is a credit entry because it will be added to Gross Profit in the Statement of Profit and Loss.
Someone correct me if I’m wrong
That’s. Your answer or the transaction entires that was given ? Seems more to that question..u cant post ur answer without showing the full question and what to do with the question
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