TRADE-IN

Est Selling Price / Resale Value

(Reconditioning Cost)
(Normal Profit) {est SP after RC * %}
(Cost to Sell / Disposal Cost)
AV/FMV/TW/MV before RC

Trade-In = FMV

Merch Inv T-In (T-In Value of Old Merchandise)

Cash (DP)
cost of
Inst A/R (Bal of Sales Price)
T-In
Inst Sales (Full Amount of Sales Price)

Trade-In > FMV

(overallowance) (-)

T-In < FMV

(underallowance) (+)

xx
xx
xx
xx

If reconditioning expense is actually incurred:

Reconditioning Expense
xx
Merch Inv T-in
xx
If perpetual (additional entry to record COGS):
COIS
xx
Merch Inv New xx
If perpetual:

charged to over/under allowance on T-In Account

treated as (reduction from) / addition to Inst Sales

NADZ

Merch Inv (NRV/FMV/AV) { collection}

Overallowance on T-IN (T-in NRV)
Inst A/R
Inst Sales (Selling Price)

Merch Inv T-In (NRV/FMV/AV)

Inst A/R
Inst Sales net (IS-OA)

xx
xx
xx
xx

xx
xx
xx

Merch Inv (NRV/FMV/AV) {collection}

xx
Inst A/R
xx
Inst Sales (Selling Price)
Underallowance on T-IN (T-in NRV)

xx
xx

Merch Inv T-In (NRV/FMV/AV)

Inst A/R
Inst Sales net (IS+UA)

xx

xx
xx