Tracking trade-in cars as inventory

Legacy KB ID: 745

Question

How do I track trade-in cars as inventory?

Answer

To record trade-in cars as inventory: Set up a new bank account, item, and vendor: 1. From the QuickBooks Lists menu, choose Chart of Accounts. 2. In the Chart of Accounts window, click Account at the bottom of the window, and then choose New. 3. In the New Account window, select Bank from the Type drop-down list. 4. In the Name field, type Trade-ins, and then click OK. 5. From the Lists menu, choose Item List. 6. In the Item List window, click Item at the bottom of the window, and then choose New. 7. In the New Item window, select Payment from the Type drop-down list. Note: If you are adding sales tax, the item should be type Discount, and marked as taxable. In most cases, sales tax applies only to the net sale (the purchase price minus the trade-in). Marking the discount item as taxable will have this effect. 8. In the Item Name/Number field, type Trade-in. 9. Select Deposit To, and to the right of Deposit To, click the drop-down arrow and click the Trade-ins account created earlier. Click OK. 10. From the Lists menu, choose Vendor List. 11. In the Vendor List window, click Vendor at the bottom of the window, and then choose New. 12. In the New Vendor window, type Customer Trade-ins in the Vendor field. Click OK. When a car is sold from inventory, and a trade-in is accepted as partial payment on this sale: 1. From the QuickBooks Customers menu, choose Create Invoices. 2. In the Create Invoices window, enter the car you are selling in the Item column. If the car is not in the Item list, you will be prompted to set it up. 3. On the next line in the Item column, select the Trade-in payment or discount item from the Item drop-down list and enter the amount of the trade-in allowance in the Amount column. 4. Next, create a new inventory item for the car you accepted as a trade-in. From the Lists menu, choose Item List. 5. In the Item List window, click Item at the bottom of the window, and then choose New. 6. In the New Item window, select Inventory Part from the Type drop-down list. 7. Click the Income Account drop-down arrow, and select the income account you use for recording the sales of trade-ins. 8. Type the Cost and Qty on Hand as zero. Click OK. 9. You will now enter a bill to the vendor created above. From the Vendors menu, choose Enter Bills. 10. In the Enter Bills window, click the drop-down arrow to the right of Vendor and then select Customer Trade-ins. 11. Click the Items tab, and in the Item column, select the inventory item created in Step 4 above. Enter the amount of the trade-in's value in the Amount column. 12. Click Save & Close. 13. From the Vendors menu, choose Pay Bills. 14. In the Payment Account section at the bottom of the Pay Bills window, select the Trade-ins bank account from the drop-down list. 15. From the Sort Bills By drop-down list in the top portion of the window, select Vendor. 16. In the box below, click the checkmark column next to the Customer Trade-ins vendor. 17. Click Pay & Close.

How did we do?

Reimbursed amount (price) for service items under time/costs.

Out of Balance warning when adjusting a previous Adjust QTY/Value on hand transaction

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