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.

Question

Business

Isabel Barton

5 August, 14:23

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.

+5

Answers (1)

Know the Answer?

Deangelo Dalton · Answer 1

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

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.

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.