I purchase and resell custom engraved silver pendants, each with one ounce of silver. Over the years, many of these have become damaged due to errors in engraving. I have kept the items on inventory, since they hold real value even damaged, since they are made of pure silver.
Well, if you've been watching the price of metals lately, they skyrocketed in 2010.
So, instead of buying new pendants made of silver, I "traded in" the precious metal for new items made of the same material.
Consequence: Metal I may have purchased over the years at an average of $20/ounce I was able to get at a cost of Zero. I only had to pay setup, factory fees and shipping
Example:
I sent 100 of X, which the average cost was $22.00 each (mostly precious metal) and they were replaced with 100 new ones at an average cost of $5 each.
How do I account for this?
Well, if you've been watching the price of metals lately, they skyrocketed in 2010.
So, instead of buying new pendants made of silver, I "traded in" the precious metal for new items made of the same material.
Consequence: Metal I may have purchased over the years at an average of $20/ounce I was able to get at a cost of Zero. I only had to pay setup, factory fees and shipping
Example:
I sent 100 of X, which the average cost was $22.00 each (mostly precious metal) and they were replaced with 100 new ones at an average cost of $5 each.
How do I account for this?