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How do you account for revenue item that was sold?

How would you account for a revenue item that was sold to an employee.

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How would you account for a revenue item that was sold to an employee. For example a chair that was recorded in the P and L when purchased is now being bought by an employee? The chair was 219.95 + VAT and is being sold to the employee for £150.

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By paulhammett
23rd Nov 2021 04:32

You need to account for output VAT on the sale of the chair to the employee i.e. £125.00 goods value plus £25.00 VAT.

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Replying to paulhammett:
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By Emilie
23rd Nov 2021 11:11

Thanks Paul!

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By Leywood
23rd Nov 2021 05:19

This is basic double entry.

You could issue an invoice.

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RLI
By lionofludesch
23rd Nov 2021 07:33

I'm guessing this is a second hand chair and £150 inc VAT is its genuine current value.

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By ireallyshouldknowthisbut
23rd Nov 2021 09:04

Presumably its sales £219.95+VAT

BIK £113.94

Unless there are other things you have not told us.

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Replying to ireallyshouldknowthisbut:
RLI
By lionofludesch
23rd Nov 2021 10:08

ireallyshouldknowthisbut wrote:

Presumably its sales £219.95+VAT

BIK £113.94

Unless there are other things you have not told us.

Well, I was waiting to see if this was a brand new chair, still in the box, or one that was bought 10 years ago and has been used in the business ever since.

Imho, it makes a difference.

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Replying to lionofludesch:
By ireallyshouldknowthisbut
23rd Nov 2021 10:32

We don't know many things.

For example if this business sells chairs (I assume so from the 'revenue item sold to employee" statement but i am assuming, it might be purchased)
We dont know if the chairs normally have a range of discounts applied.

We dont know if its second hand
Or indeed new, but faulty.

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Replying to ireallyshouldknowthisbut:
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By Emilie
23rd Nov 2021 11:11

Hi there.

Thank you for your response. My apologies for the lack of detail. Details are as follows -
Employee work remotely for the company so the company bought the employee a chair that was 219.95 + VAT. This was recorded in the P and L.
The employee is now leaving the company and wants to buy the chair. The chair has been valued at £150. My apologies if this seems like a daft question but I am still learning. I was always taught ask a question and be a fool for a minute. Do not ask a question and be a fool for a lifetime. There is only so much the books tell you!
Thank you

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Replying to Emilie:
RLI
By lionofludesch
23rd Nov 2021 11:28

Emilie wrote:

Hi there.

Thank you for your response. My apologies for the lack of detail. Details are as follows -
Employee work remotely for the company so the company bought the employee a chair that was 219.95 + VAT. This was recorded in the P and L.
The employee is now leaving the company and wants to buy the chair. The chair has been valued at £150. My apologies if this seems like a daft question but I am still learning. I was always taught ask a question and be a fool for a minute. Do not ask a question and be a fool for a lifetime. There is only so much the books tell you!
Thank you

If the chair is genuinely worth £150, credit £125 to repairs (or wherever you posted the chair originally) and £25 to VAT Output Tax.

No BIK on the employee.

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Replying to lionofludesch:
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By Emilie
23rd Nov 2021 11:38

That makes sense. Thank you for your assistance. Have a great day!

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