Question

On march 3, cobra inc. purchased a desk for $450 on account. on march 22, cobra purchased another desk for $565 also on account, and then on march 24, cobra paid $410 on account. at the end of march, what amount should cobra report for desks (assuming these two desks were the only desks they had)?

Answer 1

Cobra, Inc should report $1,015 ($450+$565) for desks at the end of March based on the transaction data on the question above. The Cobra, Inc should report the desk cost in their book when they have purchased the desk because they already have the ownership of it. The transaction on March 24 should be reported as the debt payment to the desk seller.