ENTRIES
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
06 December 2010
WHAT SHOULD BE JOBWORK PAYBLE JOURNAL ENTRIES
06 December 2010
Kindly elaborate your query
21 July 2024
Job work transactions involve sending goods to a job worker for processing or manufacturing. Here’s a general outline of the journal entries you might need for job work payable:
### Scenario:
Let's assume your company sends raw materials to a job worker for processing. The job worker charges for the processing service.
### Journal Entries:
1. **When sending raw materials to job worker:**
- Debit: Job Work in Process Inventory (Raw materials sent for processing)
- Credit: Raw Materials Inventory (Value of raw materials sent for processing)
```
Job Work in Process Inventory A/c Dr.
To Raw Materials Inventory A/c
(Being raw materials sent to job worker for processing)
```
2. **When receiving processed goods back from job worker:**
- Debit: Finished Goods Inventory (Value of processed goods received)
- Credit: Job Work in Process Inventory (Value of raw materials processed by job worker)
```
Finished Goods Inventory A/c Dr.
To Job Work in Process Inventory A/c
(Being processed goods received from job worker)
```
3. **When making payment to the job worker for processing charges:**
- Debit: Job Work Expenses (Processing charges incurred)
- Credit: Bank/Cash (Payment made to job worker)
```
Job Work Expenses A/c Dr.
To Bank/Cash A/c
(Being payment made to job worker for processing charges)
```
### Notes:
- **Job Work in Process Inventory**: This account tracks the value of raw materials sent to the job worker and the value of processed goods received back.
- **Finished Goods Inventory**: Represents the value of goods that are ready for sale after processing.
- **Job Work Expenses**: This account records the expenses incurred for the processing services provided by the job worker.
These entries provide a basic framework. Depending on specific circumstances, such as any applicable taxes (like GST or VAT) or additional charges, you may need to adjust the entries accordingly. It's also advisable to consult with your accountant or tax advisor for guidance tailored to your company's situation and local tax regulations.
### Scenario:
Let's assume your company sends raw materials to a job worker for processing. The job worker charges for the processing service.
### Journal Entries:
1. **When sending raw materials to job worker:**
- Debit: Job Work in Process Inventory (Raw materials sent for processing)
- Credit: Raw Materials Inventory (Value of raw materials sent for processing)
```
Job Work in Process Inventory A/c Dr.
To Raw Materials Inventory A/c
(Being raw materials sent to job worker for processing)
```
2. **When receiving processed goods back from job worker:**
- Debit: Finished Goods Inventory (Value of processed goods received)
- Credit: Job Work in Process Inventory (Value of raw materials processed by job worker)
```
Finished Goods Inventory A/c Dr.
To Job Work in Process Inventory A/c
(Being processed goods received from job worker)
```
3. **When making payment to the job worker for processing charges:**
- Debit: Job Work Expenses (Processing charges incurred)
- Credit: Bank/Cash (Payment made to job worker)
```
Job Work Expenses A/c Dr.
To Bank/Cash A/c
(Being payment made to job worker for processing charges)
```
### Notes:
- **Job Work in Process Inventory**: This account tracks the value of raw materials sent to the job worker and the value of processed goods received back.
- **Finished Goods Inventory**: Represents the value of goods that are ready for sale after processing.
- **Job Work Expenses**: This account records the expenses incurred for the processing services provided by the job worker.
These entries provide a basic framework. Depending on specific circumstances, such as any applicable taxes (like GST or VAT) or additional charges, you may need to adjust the entries accordingly. It's also advisable to consult with your accountant or tax advisor for guidance tailored to your company's situation and local tax regulations.
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