Section 194R TDS - Journal entry in the books of the company

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This discussion explores the correct journal entries for Section 194R TDS when a company purchases gold coins to give to dealers as sales incentives. It outlines the accounting treatment for the company, including the purchase and subsequent expense recognition. The entries for the dealer receiving the gold coins are also provided, detailing how to record the income.

CMA Sagar Das

CMA Sagar Das (Querist)
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20 December 2023 Suppose, we have purchased gold coins from a vendor to give it to dealer for achieving the Sales target.

What will be journal entry in the books of the company and the dealer?

Let be the gold coin value is Rs. 1000.

CMA Sagar Das

CMA Sagar Das (Querist)
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21 December 2023 Please reply to the query

CMA Sagar Das

CMA Sagar Das (Querist)
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21 December 2023 Query is not resolved , please reply

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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16 January 2024 1. Purchase Entry :
Gold Coins - Dr.
Cash/Bank/ Vendors - Cr

2. Given to Vendors :
Sales and Promotion Exp - Dr
Gold Coins - Cr.

3. In the books of dealer :
Gold Coins - Dr.
Incentives/Other Income- Cr.

Thanks

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