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Purchase & sale from same party

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Querist : Anonymous

Querist : Anonymous (Querist)

06 April 2013 I have purchased goods of Rs500000/ from a party on credit after paying Vat @4% on 25-8-2012. On 25-9-2012 I have sold goods of RS550000/ to same party incloding Vat of 4%. Since I HAVE TO MAKE PAYMENT TO THE PARTY CAN I ADUST THE PAYMENT WITH PAYMENT I WILL RECEIVE. HOW I HAVE TO MAKE THE ENTRY. Please help me immediately.

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)

06 April 2013 Yes, you can adjust your receipt with your payment. The entries is as follows

At the time of purchase i.e on 25-8-2012

Purchases a/c dr 480769
Vat Input a/c dr 19231
TO Mr. X a/c 500000
(Being credit purchases made from the Mr.X vide invoice no.XXX)

At the time of sale to Mr.X i.e on 25-9-2012

Mr.X a/c dr 550000
TO Sales a/c 528846
TO Vat Output a/c 21154
(Being Credit sales made to Mr.X vide invoice no.XXX)

At the time of balance amount received from Mr.X

Cash/bank a/c dr 50000
To Mr.X a/c 50000
(Being amount received through cheque no.XXX vide r.no:XXX)

OM SAI SRI SAI JAI JAI SAI

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