more-arw search

Q&A Forum

Recording machine sales that are not a fixed asset

How do you record the record of a machine sale that is not a fixed asset but a part of the normal operation of the business. We are a small production facility where our primary products sold are the ones we produce - but we also sell small production machines. We purchases these machines from another vendor, mark them up and sell them out of our operation. My thought is that the machine revenue is recorded in machine revenue and the cost of the machine should be recorded in cost of goods machines. Should there be any time that our inventory account for these products that may be in stock should be effected? does this makes sense? thanks for your help.

Answers

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Hi Anon
If you buy machines and sell them as a finished product, it looks like you are trading in them-so the purchases are inventory and the sales are COGS. Any unsold units at period end should be reported as inventory on hand.
Your customers who buy these machines may capitalize them based on how they use them, but that's their accounting, not yours:)

1631 views
Topics

Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email content@proformative.com to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.