Example of Sale as Revenue

Example of Sale as Revenue

ABC Company is carrying out a business of selling and buying shoes. The company has purchased $ 200 and sold them during the year at price of $ 300. Company also sold at 10,000 which net book value was 8000. What is the revenue of the organization?

Solution

According to definition of revenue is income which arises from the normal business activities and gain arise from other activities. The sale and gain are both income

Revenue	$ 300
Gain  ( 10,000-8000)	$ 200
Income	$ 500

Gain =sale proceed of asset minus net book value of asset.