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29 August, 21:41

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.

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Answers (1)
  1. 29 August, 22:08
    0
    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
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