High seas sales and merchant sales

This query is : Resolved

Chitranjan Agarwal (Querist)
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25 April 2015 Dear Sir,

Please Provide me the Full Treatment of High seas Sales and Merchant Sales.

In Case of high Seas sale, we have make payment in advance for import some goods and after that when our goods in sea then we sale out such goods to some other buyer. than whats treatment follow to record such transaction in his books.

Please Explain through such Example:
The issue is to map the scenario for High Sea Sales for my Client.It is as follows..
1.We will issue import order to our vendor (imported vendor)for purchase of raw material.
2.We will issue order at the rate of USD 2600 per MT FOB china port.
3.Suppose 100Mt of raw material is shipped from china and we pay immediately to our import vendor in dollars.We also pay ocean freight USD 50/- per MT to our shipping agent/vendor.
4. So we enter into an high seas sale agreement with our customer for sale of material ie a Raw material @ USD 2750/- per MT CIF.
5.My client want to book purchase of raw material in our accounting records (but without bringing the material in our stock).
6.Similarly client wish to book sales @2750/-USD without movement of material from there plant.

Kindly let me know the procedure that is to be followed for capturing the entire transaction,as i am very new to this scenario.

and same query in marchant trading also.

Thanking you for your kind consideration

CA Chitranjan Agarwal
M.No. 8587858208
Email: info@cachitranjanagarwal.vpweb.in