A man wants to buy 100 cars, which have a list price of £15,000. He is offered them at a discount of 40% of the list price of the car. Which means that the cost per car is £9000. In the Fixed Assets of the Balance Sheet, is £9000 x 100 cars listed, or £15000 x 100 cars listed, and why?
2006-09-17 02:59:37 · 5 answers · asked by g s 1 in Business & Finance ➔ Small Business
The fixed assets must show only the price after discount ; 9000 pounds x100.
2006-09-17 03:41:38 · answer #1 · answered by hariharan_hn 2 · 0⤊ 0⤋
The man will account the cars in his balance sheet at 9000 x 100 cars only because cost of his car is not the listed price, its 9000 which is his real cost .
2006-09-17 10:06:22 · answer #2 · answered by akm 1 · 0⤊ 0⤋
In generally accepted accounting principles (GAAP, here in the USA), you must record an asset for what you actually paid for it. Therefore, you have a debit to an asset account (inventory, automobiles, whatever) of 9000 and a credit to cash of 9000.
Sorry-don't know how to make the pound sign on my keyboard!
2006-09-17 11:42:20 · answer #3 · answered by SuzeY 5 · 0⤊ 0⤋
Well since your question was already answered I guess I don't have to answer it. But if you are the car dealership owner this all would take place on a flooring account.
2006-09-17 14:26:12 · answer #4 · answered by Medical and Business Information 5 · 0⤊ 0⤋
Do your own homework
2006-09-17 11:20:45 · answer #5 · answered by Anonymous · 0⤊ 0⤋