Kelly Corp. barters with Ace Corporation for goods that are similar in nature and value. The value of the goods was $1,000. The

Question

3 years ago

5

Kelly Corp. barters with Ace Corporation for goods that are similar in nature and value. The value of the goods was $1,000. The

cost of the goods was $400. If Kelly uses IFRS to prepare financial statements, what amount should Kelly recognize as income?
a. $1,000.
b. $0.
c. $400.
d. $600.

Business

1 answer:

mixas84 [53] · Answer 1 · 2022-01-01T20:00:17+03:00

Answer:

Option 1 is correct because Income is the amount that we receive from our customers when we sell them our product. In this case, the amount should be received was $1000, which the Kelly can use to buy the product she has exchanged its product with the item.

The entry will be contra entry:

Dr Purchases $1000

CR Income $1000