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BookkeepingATP
June 8, 2020
Question

How to record the invoice for the car dealership showing the trade-in amount and how to add the trade-in to the inventory item?

  • June 8, 2020
  • 1 reply
  • 0 views

Hi,

Regarding a car dealership for a used car.

I have so many questions about it and I hope to get some answers.  The Quickbooks Proadvisor support suggested me to try the community Q & A. So here we go...

1. When I issue an invoice for a client for purchasing a car. How do I record on the invoice the trade-in amount that will show subtract by amount?

2. When the dealer buys a car for the inventory. I created for each car an inventory code on Products and Services and also created a Class code for each car. And record the purchase bill and it updates the inventory count on hand. Now, I need to create a new inventory item for the trade-in item that adds to the car's inventory. How do I do that because I don't have a bill?

 

Thanks!

1 reply

LeithG
LeithG
June 18, 2020

Hi BookkeepingATP:

 

When recording a sale including a trade in, it should go as follows:

Credit: Revenue (the total value of the car sold)

Debit: Inventory (value of the trade in)

Debit: Revenue (the value of the trade in)

Debit: Cash

 

Sometimes - depending on direction from your boss/accountant - you'll be directed to record the inventory value of the trade in at more money than you gave to the client off their invoice.  This would be reflective of a profit in the transaction.  To the above, you would add the increased value to inventory, and additionally credit a revenue account not appearing on the invoice (blue book value increase, or something like that).

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